If you have worked with or been close to a business owner, you would notice that most of the services they render to their customers often do not need a physical cash payment. It is a cashless society, after all. People would rather move around with credit or debit cards to save themselves from the stress of carrying cash in bulk.
Credit card options allow more sales and profits compared to cash payments. To ensure no bump in the card payment, the business owner is charged with the responsibility of using payment processors. This not only makes the work easier, but it also processes and verifies the authenticity of the amount in question and other potential scheming attached to the card.
In other words, payment processors are systems that authorize monetary transactions when business owners receive payments from customers. Within the split second this transaction occurs, the payment processor runs the details received by the issuing bank to verify and confirm the identity linked with the card.
This method has been embraced by all rank and file that own or run a business for smooth, effective, stress-free customer service. With the convenience of using a payment processor, which appears pain-free, small business owners still struggle with a constraining stratagem that could hamper the business growth they clamor for.
5 signs that you should switch payment processors
Getting credit card processing for small businesses takes a few attainable steps, but some signs confirm that the business owner could have blindly partnered with a rip-off payment processor and needs to look elsewhere. The signs are explained below:
A contract, when signed, means the business owner has agreed to the company’s terms and conditions. This is what traps most of them without their knowledge. To hasten the protocol and dive into using their services, the entrepreneur signs off the contract and moves on without questioning. A contract could be short-term or long-term.
The mediocre company can use both long-term and short-term contracts to its advantage. They could draft an unnecessarily lengthy contract with hidden terms that the business owner may not get to read until their expectations are not met, and they begin to look for a way out.
The long-term contract could be binding for about three to four years, and some may come with automatic renewal. Besides that, there could also include an expensive early termination fee. This sign can be used to easily fish out incompetent payment processing providers.
2. Excessive undisclosed charges
These fees are finally recognized in your account statement if it was not seen earlier in the contract. There will always be fees that come with rendering services, so it is not out of place to be charged. But there are plausible, logical fees, and there are unaccounted miscellaneous fees. When the fees do not fairly benefit the business owner, it becomes junk.
Instances like when an application fee upon creating an account or fees that come with setting up a new account is insanely high are definite signs of a payment processing company that is not transparent. Although this may seem like it is not enough to switch payment processors if it is backed up by tremendous service.
3. Deficient support and/or customer service
This sign can go almost undetected for a long time until the business owner has to complain about something. Unfortunately, this is not new in industries like processing companies. Either you are faced with an impractical, inapplicable, or uninformative guide that the company assumes should handle such situations or a programmed unhelpful response from support.
If it does not include a 24/7 helpline, an option of a live chat with a representative, or an activity-specific account manager for your assistance, then it is substandard, and you need to switch payment processors.
4. Hardware-Software compatibility problems
For attentive business owners, the issue of hardware and software compatibility could be found out and addressed during the account opening phase. However, there is a tendency that no upgrade of the latest changes will be done for you. When the payment processor you use is selective with the payment methods they accept and process, it poses a limiting factor to sales.
This is common with using a particular payment processor for a long time. The provider is lackadaisical with upgrading the credit/debit card terminal.
5. Overpriced reserve demand
Most providers put forward a reserve as a means to guard themselves against threats of chargebacks. Chargebacks arise when a customer contests a transaction. Some reserves may require that a certain percentage be taken from every transaction to build a reserve fund for the processing company.
They will use this to make up for any chargeback prices that would emerge in the future. It is not usually an issue because the motive is valid. Nonetheless, this has become an avenue for the providers to take higher than needed to cover the said cost.
These signs should not be overlooked because it does not have much relevance, as the accumulation of so many of these charges could be detrimental to businesses.