How to Select a Credit Card Payment Processor

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In today’s business environment, it is almost a foregone conclusion that businesses of all sizes are prepared to handle electronic payments. Customers have come to expect the convenience of credit card, debit card, and/or online accessibility. For many businesses, this means working with a credit card payment processor to help accept and track these payments securely.

Choosing a merchant service or payment service provider can be a difficult undertaking. What exactly should you be looking for? Can you get away with a bare bones account or do you need something more robust? Today, we will be exploring the topic of selecting a credit card payment processor with these questions in mind.

Person paying online

What do Credit Card Payment Processors Do?

The old days of cash only businesses are quickly falling by the wayside. For the rest of us, payment processing is a reality of doing business. Even traditional cash/check businesses such as plumbers, landscapers, and food delivery services often offer mobile payment processing for customer convenience.

Credit card payment processors are the companies who process electronic payments via credit cards, debit cards, and sometimes alternative methods. Payment processors assist with the authorization, authentication, and settlement of credit card payments.

This involves interfacing directly with the issuing bank for credit and/or debit cards, the credit card company itself, and the bank receiving payment (the merchant’s bank). While it isn’t necessary to understand every little detail of this process, it is important to understand that payment processors take on the heavy lifting of clearing electronic payments.


Merchant Accounts vs. Payment Service Provider (PSP) Accounts

Payment processors generally offer two distinct services:

  1. Merchant accounts

  2. Payment service provider accounts

Merchant accounts are ideal for businesses clearing over $10,000 in electronic payments per month. Merchant accounts are the more robust option and generally offer the best rates for higher volume businesses. One of the key advantages of a merchant account arrangement is that it comes with a direct relationship with the processing bank. This direct relationship comes with improved rates and potentially more responsive customer service.

PSP accounts are better suited for merchants who process $5,000 or less in electronic payments per month. Note that the $5k to $10k range is in the middle, and merchants in this range may want to consider both options before making an informed decision. PSP accounts flow through a third-party processor in lieu of the merchant having their own account. Even though rates may be higher, some small businesses still save money as PSP accounts generally have no monthly fees. The potential downside is less personalization and customer service accessibility.

Choosing a Payment Processor that Fits Your Needs

Of course simply counting your total dollar volumes is not the end-all-be-all of choosing a payment processing company. There are a litany of other factors to consider, including:

Working with a Payment Processor You Trust

What often gets lost in the shuffle of buzzwords and numbers is customer service and a solid platform. Payment processors are an incredibly important part of most businesses. For example, if there is an accusation of fraud, inferior payment processors may not have the knowledge or resources to help. This may lead to chargebacks, account suspensions, or even account terminations.

Understanding Payment Processing Fees

Choosing the correct payment processor is more than just looking at the basic rates. Many processors charge monthly fees, processing fees, qualified vs. non-qualified rates, and other hidden fees. Always strive to understand exactly how and what you will be charged before entering into a relationship with a payment processor. Look for payment processing organizations who are experienced with a proven track record of success.

Lock on Credit Card

Always Consider Fraud, Data Security, and Other Protections

Even the most high tech and well-financed companies like Starbucks experience security breaches from time to time. Unfortunately, data security and fraud concerns permeate all business types and sizes. So what can you do? Speak with your payment processing company to understand how they handle security concerns.

Modern payment processing organizations should offer fraud protection, have a data security plan in place, and have a protocol for handling suspicious activities. As we mentioned above, security issues can actually lead to penalties against the merchant including a potential for the account to be closed altogether!

True Merchant Offers a Wide Range of Payment Processing Solutions

True Merchant is proud to offer payment processing solutions which are simple, secure, and supported by a qualified team of industry professionals. Our products range from online payment solutions, credit card machines, mobile credit card machines, and of course payment processing.

At True Merchant, we understand that choosing a payment processing service is not what most business owners look forward to. It can be daunting, confusing, and it isn’t the most thrilling part of operating a business. However, working with a well-established payment processor will allow your business to meet customer expectations for convenience, stay protected from fraudulent activity, and avoid costly fees.

This is a very important decision for any business. Contact True Merchant today to learn about how our payment processing services can help your business reach the next level!