From the blog Understand Where your Money Goes
Businesses across the spectrum must accept credit cards—from retail stores to manufacturers, and healthcare practices to restaurants—it’s a necessary financial tool.
And while it can bring frustration, higher cost and less peace-of-mind to most business owners, it can be beneficial when managed correctly. Whether driven to accept credit card payments for convenience, by customer demand or in hopes to increase sales, acceptance has touched every industry.
So, how do you manage the process and maximize the profit to your business? There is a lot of information out there about credit card processing and it can get confusing. It’s an industry that leaves little room for trust, as many merchant service companies bank on the notion that business owners won’t want to dig into the trenches of regulations, fees, and the fine print of contracts. Rates are adjusted without the business knowing, and contracts can be punitive to terminate; and salespeople use misleading tactics for a “quick win” instead of working to foster long-term relationships. All that leaves the business paying way more than they should and leery of anything related to credit card processing.
All that to be said, it doesn’t have to be that way. There can be transparency in the industry. First, it’s important to find a company that works as an advocate for the business and is motivated to look out for the company’s best interest.
So, how can you tell? Here are some things you should look for when it comes to credit card processing:
- Transparency. Anything less than transparent billing practices will erode profitability. A lot of the credit card sales companies in the industry are not transparent; and well, sometimes even sketchy. Dishonest billing tactics often leave a company paying more than they should on each transaction.
- Open contracts with no penalties. Most contracts are fundamentally similar in overall structure; it’s when you get into the details that the specific terms often vary widely. That said, it’s critical that certain clauses are verified upfront to head off potential issues. Many times, a company will get locked into something that diminishes profitability to the business and by the time it is noticed, it’s extremely difficult to terminate the contract.
- Training and on-going support. Often, businesses are left on their own after implementation. There is limited knowledge of their setup, no customization to optimize payment acceptance needs, and no help managing the bottom line. When help is needed, it is difficult to find; not only does the business lose money, but valuable time.
- The ability and knowledge to customize your payment system to fit your business. A “one-size fits all” approach to solutions for businesses does not maximize profit. When a manufacturer or medical practice is set up the same way as a retail shop, the business cannot take advantage of card association rules which maximize efficiency and help drive fees lower.
- Extensive ability to manage the ever-increasing risk and fraud concerns. Business owners are worried about fraud and with threats increasing, it’s no wonder. Fraudsters are getting smarter and craftier and compliance can be daunting. Who will you call if you are subject to fraudulent activity? It’s imperative you have an expert advisor who you can connect with at any time.
Over the course of the next few weeks, we will elaborate on each of these issues and provide insight into credit card processing—the good, the bad and the ugly. When businesses have an advocate to guide them through selecting, implementing and managing a payment processing solution, they win. Knowledge is power—and profit.