How do I Choose the Best Credit Card Processor?

Each business owner may have a different idea about the factors that make a credit card processor the best option for his business. Most people, however, compare companies in terms of fees, equipment costs, and processing times in an attempt to select the best one. The availability of reliable customer service and technical support may play a role as well.

Most people turn to credit card processors, often called merchant account providers, for credit card payment processing. These processors serve as middlemen between a business owner and the organization that provides a credit card to a consumer. A businessperson opens a merchant account with one of these providers and sends its credit card transaction information to his chosen provider. The merchant account provider takes care of processing the transaction and deposits the money in the businessperson’s account—for a fee.

For many people, selecting the best credit card processor means choosing the company that has the lowest fees. There can be much variation in fees from one company to the next. Usually, these fees include a percentage of each transaction, and some processors charge a flat fee per transaction as well. When comparing processors based on fees, it’s important to read the fine print. Some companies charge low per-transaction fees and then attempt to make up for it by charging higher fees for issuing statements, processing applications, and creating accounts.

Equipment costs are also an important factor in choosing the best credit card processor. If a person runs a brick-and-mortar business, he’ll usually need equipment to swipe credit cards and send transaction information to his merchant account provider. Many providers lease this equipment to their customers, and some charge more than others. Most people attempt to select a provider that offers quality equipment at the lowest possible cost.

Those who run Internet businesses don’t usually have to worry about buying or leasing equipment. Instead, they have to make sure their provider offers an easy way to process transactions online. This typically involves allowing customers to complete a secure online order form and have it sent for processing via the Internet.

Processing times and the availability of support are also important when choosing the best credit card processor. Most credit card processors deposit money into a business’ account within about 48 to 72 hours of a transaction. Others have significantly longer lag times. Additionally, a businessperson typically considers whether a processor offers good customer service and technical support. This can be crucial when unforeseen difficulties arise.

In the past, a bank was the first place a business owner would turn when he was ready to begin accepting credit cards. Banks, however, are known for charging high fees and being difficult for the small business owner to work with. They are frequently reluctant to work with home, Internet, and mail-based businesses because they fear these companies will have frequent instances of fraud and chargebacks, which occur when a customer requests a return of the money debited from a credit card.