man in suit holding out a credit card
Choosing a credit card processor may seem simple and straightforward, but there are many aspects to consider when making this decision. — Getty Images/welcomia

You know your business needs to accept credit cards as a payment option. Now you’re faced with the difficult choice of which credit card processor is right for your company.

Each credit card processing company is different — with varying features, policies and fees. If you’re in the throes of making this decision and want to narrow down your options, here are five points to consider before choosing a processor. [Read our full guide to choosing the right credit card processor.]

1. Cost

There are many different fees associated with credit card processors, including:

  • Setup fees. Depending on the company, you might have to pay for the setup of your credit card processor.
  • Interchange fees. There are fees associated with each transaction. Most range from 2-3% of each transaction.
  • Monthly statement fees. Many companies charge you monthly to cover the expense of mailing you your statement.
  • Monthly minimum fees. If you don’t meet the minimum monthly processing fees established by the processor (typically $10 to $25), you will have to cover the difference.
  • Early termination fees.If you cancel your contract early, you might be charged a high fee, sometimes in the thousands.

You’ll also want to consider the cost of renting versus owning your own processing equipment. Depending on your business and budget, it might make more financial sense to sign a flexible month-to-month contract than to purchase the equipment up front.

2. Accepted payment methods

Your credit card processor should be versatile, meaning it should accept all major credit and debit cards, prepaid and gift cards, and possibly even digital wallet payments from Apple Pay, Samsung Pay and Google Pay.

While it might cost more to accept most payment methods, as a result, businesses often experience an increase in sales. The more tech savvy you are, the less customers you’ll have to turn away, and the more business you will attract.

While it might cost more to accept most payment methods, as a result, businesses often experience an increase in sales.

3. Security and fraud protection

Fraud protection is a crucial element to research when choosing a processor. Failing to consider security and reliability is one of the worst mistakes you can make when choosing a payment processor, and it could cost you big time.

You’ll also want to determine who is responsible for your consumers' data security, and whether the processor is compliant with PCI-DSS (Payment Card Industry Data Security Standard) regulations to avoid any legal issues.

4. Compatibility

If you already have a payment processing or point-of-sale (POS) system, you’ll want to look for a processor that is compatible with your existing equipment, rather than making unnecessary additional purchases.

Ask yourself what you need as a business. For instance, maybe you’re an e-commerce store that requires accepting online payments. You’ll have to choose a processor that makes this process seamless for both you and your customers.

Choose one processor that supports all of your needs, rather than managing two or more at once. Having more than one processor at one time could also potentially breach contract with one or both of them.

[For more on choosing a POS system, click here.]

5. Customer support

Technology can be problematic. You’ll face inevitable issues with your payment processing, from technical bugs to billing statement concerns. Because of this, you’ll want to choose a company that offers 24/7 customer support.

You should be able to get a good idea of a provider’s customer service standards — as well as clarify the above points — during your conversation with a company sales rep. Pay attention not only to their answers, but also to how they respond to your inquiries and concerns. Are they easy to reach? Do they take the time to explain everything clearly? Are they patient? Are they trying to rush you toward signing a contract?

This experience should factor into your final decision.

CO— does not review or recommend products or services. For more information on choosing the best credit card processor, visit our friends at business.com.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

Published April 29, 2019