Get a free quote on Servistree’s merchant services for your South Florida business.

Don’t Just Sign! Read Your Credit Card Agreement

Published November 6th, 2017 by Servistree

“You have to spend money to make money.” This phrase rings true for everyone, including business owners. Because paying with a credit card is so common, as a business owner, you’re going to have spend a little bit of money to be able to accept these kinds of payments. For many business owners, this means your credit card processor is probably taking around 2 to 5 percent, on top of other fees, from your daily receipts.

While the amount seems small, these small fees add up. If your annual gross is $100,000 in credit card receipts, around $5,000 of that is going towards your privilege of being able to accept these credit cards. For some individuals, this amount is just unacceptable.

Do some homework before you sign up with a credit card processing company. A little diligence can go a long way – mentally and financially!

It’s Like Getting a Credit Card… But Backwards
Signing up for processing services is similar to getting your own credit card, but you shouldn’t sign up for anything without thoroughly reading through the fine print. This is an important portion of the document, which will portray all of the information you need regarding late fees, interest rates and other major details.

Signing up with a processor isn’t much different than signing up for a credit card.

While the friendly individual on the phone repeatedly informs you that their company only charges 2 percent of every transaction for processing your credit cards, the fine print may say otherwise.

After reviewing the fine print, you may come to understand that they charge 2 percent of receipts PLUS a statement fee to each company whose cards you accept – on top of the interchange costs and several other fees for everyone with hands in the credit card processing jar. When it’s all said and done, you may be paying much more than 2 percent, leaving you bound to a contract that you didn’t fully understand because you didn’t properly review the fine print.

Shop around Before You Start Swiping – and Speak Up
Reading through the fine print does not just apply to unknown entities. The bank you choose for your services is going to want to bundle everything with them – including “merchant services”. “Merchant services” is a fancy name for credit card processing. Since the bank is where your money is already, why not bundle services within the bank?

While it may seem convenient, this isn’t necessarily the best idea. Because so many other companies are emerging who offer mobile swiping, secure online processing and lower frees, it’s hard for big banks to match up. Before you sign up for these services with your bank, shop around and compare their fees. At the end of the year, the difference between 2 percent and 3 percent charges is going to make a world of difference.

If you think the company that you’re considering charges too many fees, don’t be afraid to speak up. Some of these companies are willing to negotiate costs or reduce tacked on items, such as application fees and statement charges.

Think about the Equipment
Beyond just the back-end fees, you could be expected to shell out some cash before you even get started. Companies sometimes expect you to buy their equipment, but because the tools for processing credit cards have gotten smaller, they can be inexpensive if you choose the right company.

During your search for the right company, be sure to look into how much you’re paying for their equipment. Does the equipment require a phone line, Internet or data connection? Do you buy or rent the equipment and are you going to have to return the equipment if you leave the company? Figuring out what you’re going to be paying for is important, because you don’t want to be overcharged for services you won’t be using or out of luck if the piece of equipment decides to stop working.

A little bit of shopping around can do your wallet a huge favor.

Not All Terminals Are Created Equal
Every credit card you have in your wallet is unique – from their terms to their rewards. Credit card processing companies are also unique in their own way. When it comes to saving money, you need to do what you can to get the most out of your financial situation, even it means reading the fine print word for word.

Credit card processing can be a difficult thing to understand and leave you with many unanswered questions. If you’ve done your research but need more assistance, contact us online or give us a call at (866) 944-3244.

‹ Back