Top 3 Mistakes Merchants Make with Third Party Credit Card Merchant Accounts
In order to adapt your business to digital transactions during the coronavirus pandemic, you need to find the right third party credit card processing company. By offering efficient, free payment processing on your business’s website, you could set yourself apart in an increasingly competitive ecommerce landscape.
By the same token, these mistakes could make you fall behind. Find out the 3 most common mistakes that merchants make when dealing with third party credit card processing companies so that your business doesn’t have to deal with the consequences.
1. Avoid high fees
A contract with a third party credit card processing company includes processing fees. These are agreed upon in advance between the processing company and you. You need to be informed about the decision-making process in choosing a third party credit card processing company so that you don’t get stuck with unnecessarily high fees.
2. Be aware of volume limitations
A primary purpose of using a third party credit card processing company is to avoid the high installation and subscription fees associated with merchant accounts.
However, certain restrictions on the volume of transactions serviced could make the third party processor an expensive option. The free payment processing you offer your customers may end up being an expenditure for your business rather than a selling point.
The reason is that some third party credit card processing companies set limits on maximum (or even minimum) numbers of transactions that change the fees they charge to process your payments. To make sure your agreement with your processor is exactly as it seems, ask about these limitations and how they impact the rates you’re going to pay.
3. Avoid cancellation fees
A third party credit card processing company will often waive cancellation fees. This is one of the main reasons to use them over regular merchant accounts.
However since they sometimes offer this waiver, one mistake you could make would be to assume that they always do. This could put you in a position where you’re accepting surprise cancellation fees and restrictions as a result of trying to offer your customers free payment processing with what you thought was a convenient third-party client.
Read the exact terms of conditions of the third party credit card processing company’s contract to avoid unwanted cancellation fees.
The Takeaway
Free payment processing is an enticing service that you want to be able to offer your customers. By using a third party credit card processing company instead of a traditional merchant account, you are probably trying to avoid service fees, cancellation limitations, and high rates.
If you don’t read the contract carefully or work with your merchant account provider to choose the third party credit card processing company carefully, you could be stuck with unwanted fees, which you may then be tempted to funnel down to your customers, which could hurt your business.
Find the right payment processing options for you and your customers. Contact Charge at (888) 924-2743 to see your options.