In the world of plastic we live in, it’s necessary to accept credit and debit cards to succeed in business. Customers are used to using their cards in person, online, or by phone, so merchants who don’t accept a credit or debit card for payment are a turn-off to most consumers.
In a sea of credit card processors, how do you find the right one for you? The most logical place to start is by asking your trade association whom they recommend, endorse, or partner with. Support a processor that supports your industry. Do your due diligence before signing on the dotted line—we recommend you educate yourself on typical fees and costs as well as some important expectations if you are new to accepting credit cards.
No matter who you sign up with, you can expect some upfront costs and ongoing credit card processing fees. This includes buying a credit card terminal or POS system to accept the cards. Manually keying in a credit card is generally more expensive because the risk of fraud increases when the card is not in your hand, so these required terminals are in your best interest.
Fees and Costs
Let’s break down the most basic fees and costs for accepting credit and debit cards.
Interchange fees: These fees are charged for every transaction and paid by the payment processor to the card-issuing bank. The fees range from about 1.60% to 3.50% of each transaction. However, the rate you will actually pay will be based on the type of card accepted (credit, debit, or rewards cards), the type of transaction (in-person, by phone, or online), and the total amount of the transaction.
Monthly statement fees: The credit card processing company might charge you monthly statement fees to cover the expense of mailing you a statement. On average, most processors charge about $10 per month.
Application and setup fees: You may incur an application fee from some processors. Buying and setting up a credit card terminal might have an initial cost as well or may be provided free of charge for the duration of your relationship.
Monthly minimum fee: This refers to a minimum dollar amount a processing company might charge in a given month, even if you have no transactions.
Monthly gateway access fee: Some processors might charge you for providing a payment gateway that which transmits each transaction to the credit card companies. Monthly fees average approximately $10 to $30.
Early termination fee: Some processors may charge you this fee for early cancellation of your contract. The fee can cost anywhere from a few hundred dollars to thousands of dollars. Be sure you ask what will happen if you want to move on to another company.
How long will it take to set up?
In most cases, terminals and POS systems can be programmed remotely by your processor, but be sure to ask how long a prospective processor will take to set up your account and install the equipment. Make sure the processor can provide some support at a time convenient to you.
What are the accepted payment types?
If you run a retail business, you will want to make sure your processor accepts all major credit and debit cards so you don’t have to turn away any customers regardless of what their form of payment is. If appropriate for your business, ask about near-field communication (NFC) technology so you can accept digital wallets such as Apple Pay, Samsung Pay, or Android Pay. This allows customers to make purchases using their smartphone or tablets. The number of people using mobile payment systems exceeds 150 million people.
How helpful is customer support?
Having technical support available 24/7 and/or access to a dedicated account executive may be important to you depending on the hours of your business. A dedicated account executive should be able to explain any fees or costs that you don’t understand.
If you would like more information on credit card processing from Chosen Payments, please contact us at 855-4-CHOSEN.