Today’s market is tricky. Cash and checks are slowly being used less while credit and debit cards have now become the consumer’s payment of choice. It is almost imperative for businesses to keep up with this trend to gain a competitive edge. Almost every consumer has a credit card, but not all businesses accept them. This is why card merchant services for ISOs are taking the marketplace by storm.
Merchant accounts allow businesses of all types and sizes, from how to sell payment processing retail to restaurants to lodging, the ability to accept credit and debit card purchases. This type of bank account is tied to a credit card processor that transfers payments from the customer to the business’s account. It lets the business expand and simplify payment procedures that in turn, increase revenue and customer base.
Factors to Consider in Comparing Providers
Card merchant services for ISOs are a million-dollar enterprise. Given this, there are many different providers to choose from, all different in their offered rates and fees, track records, technical support and the length of the contract.
Once the decision to set up a merchant account has been done, businesses have to choose between real merchant account providers and banks. Banks tend to have outdated equipment and hire merchant account providers to do the work for them. Going to a provider directly saves the merchant money in the long run.
Rates and fees differ depending on the company, but two of the most basic costs are the Discount Rates and the Transaction Fees. Discount rates are the percentage of each sale that the processing bank gets to keep. Each sale is classified into 1 of 3 qualification levels (Qualified, Mid-qualified and Non-qualified) and is discounted depending on that qualification. Rates and levels are ultimately determined by the type of card used and how the purchase was processed.
Per Transaction fees are small fees that the business has to pay on top of the discount for each transaction. Low per-transaction fees usually mean a higher discount rate, and vice versa. Average cost is 20 to 60 cents per transaction.
A proven track record is mandatory to ensure a secure transaction. Better Business Bureau (BBB) reports and their number of years in the business should be considered before signing on with a service provider. Numerous complaints can mean unpleasant transactions with other businesses, so choose one that is reputable.
Customer service and technical support should be considered in establishing a long-term partnership with a provider. Some of the questions that should be answered are the following: Do they offer training? How do they treat their existing customers? What are their customer service hours like?
Most banks require a 3-year contract and a cancellation fee. Longer contracts mean better rates and can help the business in the long run.
Because of the importance of the credit card today, card merchant services for ISOs should be considered for businesses to have better payment schemes and to regulate cash flow.