Matt Moore

5-common-merchant-services-misconceptions-about-payment-providersAccepting credit cards at your business is an absolute necessity in today’s society. As the average consumer continues to move away from cash payments and towards credit, debit and online payments, not being able to satisfy those payments needs is the first step towards a decline in revenue. Merchants services, and especially specific types of new solutions or online solutions can sometimes be difficult to implement or even get used to, not to mention the potential clash with your payment processing provider. Although, all payment processors are different, and provide different pricing, services, and equipment; understanding some of the most common misconceptions about merchant services and the different types of providers as a whole will reduce your stress level and keep your hard earned revenue in your pocket, where it should be.

The following are 5 common misconceptions about merchant services that may have either deterred your business from accepting credit and debit cards, or perhaps soured your current relationship with your payment processing provider. We are here to help clear the air.


1. Credit and debit cards charge cost the same to accept with any payment processing solution and provider

Fact, many companies use a tier structure in which it costs much less for customers to use a PIN with a debit card rather than a credit card, particularly one that offers rewards. Many processors will use a flat fee for debit rather than basis points on the transaction like it is for credit card processing. Typically a debit card is a per item fee rather than a percentage of the total transactions, which is typical of credit card fees. Ensure that all fees are very well explained when signing up with a payment processor. 


2. Only banks can provide payment processing for your business

Fact, large payment processing providers and ISO’s are often cheaper and provide better value adds to your business, especially when it comes to online solutions. More often than not, unless your business is doing very high volumes, most large payment processing providers will neglect your business as it is less profitable than the national chains, or large businesses. Take the time to go through a few different providers and view cost proposals to ensure what pricing model fits your business the best.


3. A “monthly minimum” means you pay that minimum each month regardless of volumes

Fact, if a monthly minimum of $25.00 is set to your account, and you only process $15.00 in fees, you may have to cover the $10.00 difference. Not all providers are the same. Some providers may charge you the entire $25.00 because you did not hit the minimum amount in fees, and some may not charge a monthly minimum at all. But just to be clear, if you do have a minimum placed on your merchant services account for your credit card and debit  card accounts, you will not be charged that amount if you hit that minimum in fees. This is very typical with most payment processing providers.


4. There is nothing I can do to prevent chargebacks – the cardholder always wins

Fact, There are numerous ways to prevent the amount of chargebacks that you receive against your business. Establishing a secure payment processing process when dealing with customers will help create good habits. Always check the name on the credit card, and keep your terminal technology up to date with the required EMV and PCI compliant hardware. Also, when in doubt, ask for a secondary piece of ID. There is no law that says you have to accept a credit card from a customer. You have the right to refuse any business you feel may be fraudulent or a customer using a stolen card. Also, always keeping signed receipts of the transactions for your files is a great habit to keep in case you need to fight a chargeback.  


5. Always choose the processing company with the lowest rate.

Fact, you’re better off looking at your overall business needs before you make this decision. Contracting with a payment processing provider with the lowest rates will 9 times out of 10 get you into some hot water. Service and support will not be up to par, the equipment may be out dated, and return policies or tech troubleshooting may be difficult to negotiate after the contract has been signed. You typically get what you pay for. If you have low rates, don’t expect top tier support.

Choosing a payment processing provider can seem daunting. However, you can avoid most of the pitfalls. Use these misconceptions to help make the right decision, and ask as many questions as it takes for you to feel comfortable. Great payment processing providers will give you all the information upfront, and will help reduce the amount of questions you have. For any questions about merchant services, or to simply have your current payment program reviewed, please contact us and one of our sales professionals will connect with you in no time.


Merchant Services Survival Handbook: A How-to-Guide to Payment Processing

Matt Moore

As the President and Co-Founder of BNA Smart Payment Systems, Matt is responsible for the company’s strategic direction, daily operations, and growth. Entrepreneurial by nature, he brings a wealth of sales and marketing experience earned from over 36 years in business. He has developed, implemented, and directed international sales and marketing strategies, established strategic alliances with international companies, and demonstrated leadership in the electronic payments market. Prior to BNA, Matthew served at the senior levels of major EFT/POS companies, helping them increase sales and optimize customer service. Matt is also a father of three, a fitness enthusiast who does power lifting and CrossFit, and he enjoys weekends at the cottage.
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