How to Choose the Best Credit Card Processor for Your Business

Credit Cards

Most business owners realize the importance of being able to process credit cards. However, they also want to do it with a reliable processor that doesn't charge an arm and a leg. The process of finding the right credit card processor can be challenging and confusing. The following information will help you know what to look for when choosing a credit card processor for your unique business needs. 

Factors to Consider When Choosing a Credit Card Processor

There are dozens of credit card processors all promising to help take your business to the next level of success. How can you be sure you're choosing the one that is best suited to your needs? Consider the following factors when narrowing down your options.

* Transparency with Pricing

When you sign on with a credit card processor, you enter into a unique arrangement between four parties. This includes you, your credit card processor, the credit card company, and the card issuer's financial institution. There are three basic pricing structures used with credit card processors. We will briefly discuss these below. 

- Tiered Pricing

With tiered pricing, you don't really get a clear up-front picture of what your fees will be because they will change depending on various factors. These factors could include the type of card used, the cardholder's zip code, and whether or not a pin code was used to complete the transaction. 

- Interchange Plus

With interchange plus, the merchant pays the interchange fees from the various credit card brands, plus a small markup. With interchange plus, your fees can vary depending on the card brand being used and the transaction type. See a detailed comparison of tiered vs. interchange.

- Flat Rate Pricing

With flat rate pricing, you pay one rate to your processor no matter what the details surrounding the transaction are. There are no loopholes present for the addition of extra fees to take into account, making this the most upfront choice in terms of transparency of fees. 

* Online and Offline Payment Options

Ideally, you will want to choose a credit card processor that allows you to accept payments both online and offline. If you have a brick and mortar location in addition to a retail website, this is of paramount importance. Most processors provide equipment that can easily be plugged into your telephone line at your place of business, allowing you to process credit cards on the spot. Some also include a smart phone reader that allows you to process customer's credit card transactions on the go. 

* Per Transaction Price

When it comes to processing credit cards, you have two sets of fees to keep in mind. One of your monthly fees that are charged to you based on the amount of credit card processing you do in a month. The other is your transaction fees that are additional charges for each credit card transaction that you process. While you don't need to make your decision based solely on transaction fees, you do want to take them into account when making your decision. 

* Customer Service

When you're dealing with advanced technology such as this, you want everything to run smoothly so that it doesn't affect your business in a negative way. Even with the best companies, things will always go wrong from time to time. That's where excellent customer service comes into play. You want to choose a company that cares about you and your business relationship with them. 

* Your Business Type and Set-Up

Last but not least, it's important to consider what type of business you have and what you anticipate your average ticket prices to be. If most or all of your transactions take place online, you may need an entirely different processor than someone who accepts mostly in-store payments. Additionally, inquire about how high-risk items or high-ticket prices will affect the rates you are charged. 

Top Credit Card Processors for Various Business Models

* Best Choice for Large Transactions

Payment Depot offers a wide selection of membership plans, transparent pricing, and superior customer service. This is why they are the choice of many large retail chains across the nation.

* Best Choice for Newbies

For new businesses, reasonable rates and easy set-up are important features when choosing a credit card processor. Square provides sleek equipment, modest rates, and the ease of use that new business owners are searching for. 

* Best Choice for Online Integration

Shopify offers a lite plan that features low rates and the ability to accept in-person and online credit card transactions right on your website or Facebook page. It can also be integrated with Quickbooks software if needed. 

* Best Choice for E-Commerce

Paypal is a great choice for e-commerce based businesses. Paypal offers ease of use, funds can be transferred between accounts easily, and the rates are also reasonable and transparent. In integrates easily in various website formats as well.

* Best Choice for Non-Profits

Dharma offers discounted rates to those who operate non-profit organizations. They also feature an easy-to-use website and excellent customer service. 

Did You Know? - Facts about Credit Card Processing

* Interchange Rates are Unpredictable

There are good credit card processing companies out there who use the interchange pricing system. Just remember that your rates will be less predictable when using a processor offering interchange pricing. 


Kristin Marquet