So you’re setting up an eCommerce site or mobile payments, or opening a retail store or B2B operation, and you’re looking for a merchant services provider to set you up to accept electronic payments. Or maybe you’re unhappy with your current merchant services provider. Maybe you just can’t put your finger on the real problem and yet you’re on the verge of switching gears.
In either case, if you’re actually thinking about this then take time to consider some of the primary factors involved in selecting the right provider. For example, having an effective account manager or merchant services representative in your corner, dealing with a firm that quickly solves your problems, and understanding rates and fees in relation to value-added services can set the stage for long-term, beneficial working relationships.
Account Manager / Merchant Services Representative
Do you have an effective account manager or merchant services representative in mind or already working with you?
An experienced representative will be knowledgeable about your industry segment and how others within that segment use electronic payments to address existing needs and future goals. This person will have electronic payments expertise and will educate you when necessary, will help you to identify and define your short-term requirements and long-term goals, and will freely offer professional recommendations. The skilled representative has your best interests in mind and will let you know about recommended solutions provided by the represented firm, as well as solutions provided by other firms in cases when the represented firm doesn’t offer them. If you’re looking for a representative, the advantages of carefully searching for and selecting the right person to assist you can’t be overstated.
There are many fine customer service departments and customer service people who do their utmost to help customers in the best ways possible. Yet some are thwarted because they lack authority to deal with certain issues, or because systems are lacking that would facilitate customer problem-solving, or because the systems in place actually get in the way.
You’ve possibly been there before—customer service hell! You have a problem you’ve been trying to correct for hours amidst your busy daily activities. Then your provider’s automated phone system keeps you on your toes for 5 – 10 minutes. Next, the customer service representative takes 10 more minutes of your valuable time on the phone assuring you that you’re speaking with your personal representative, determining that it’s okay to be your best buddy, and grilling you for every detail of your life’s history because they receive calls all day long from people who aren’t who they say they are. You appreciate their efforts in protecting your interests and wonder at the same time why a simpler way of handling this hasn’t been thought out. Then it all goes downhill from there when the person you’re speaking with can’t help you for one reason or another and transfers your call into call-waiting paradise.
There is hope, though! If poor customer service is a concern for you, then find a merchant services provider that empowers its employees to help you with your needs and to solve your problems. There are plenty of firms out there that thrive on this aspect of providing excellent customer service.
Rates & Fees
Are you concerned that merchant account rates and fees may be too high? This is one of the most common reasons businesses switch services. Is it justified?
As with most things we buy, price is one of the first things that come to mind. Yet do we sometimes shoot for the lower price without thinking about the importance of the value we’re receiving? Did that apple taste good? Did that umbrella keep me dry? In relation to merchant services, we might ask ourselves, Is our representative knowledgeable, helpful, friendly, and responsive? Sometimes factors like this can make all the difference.
The greatest percentage of merchant account rates and fees assessed consists of a category named interchange, which has been established by the major card brands. They price these charges by card and transaction types and assess them for all transactions, regardless of the firm providing your service. Interchange fees for credit cards are determined by such factors as the costs associated with marketing certain kinds of card products; for example, personal cards, rewards cards, business cards, and corporate cards. Another important factor is the increased risk of loss associated with certain types of transactions. For instance, eCommerce transactions processed over the Internet have greater risk of being fraudulent than transactions involving EMV security chips in a face-to-face retail environment, and so a higher interchange rate is assessed. Interchange charges assessed to merchants for most debit card transactions have been set as a result of federal regulations enacted vis-à-vis The Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010. In 2015, there were more than twice as many U.S. debit card transactions as credit card transactions.1
Credit card processing companies and subsidiary independent sales organizations (ISOs) provide many value-added services directly to merchants, which have associated costs. These services may include the following:
- Internet payments gateways supporting eCommerce, back-office transactions, and mobile payments;
- point-of-sale (POS) systems with CRM capabilities;
- credit card terminals;
- fraud prevention services using advanced predictive analytics technology;
- payment card industry (PCI) compliance resources to enhance data security;
- application programming interfaces (APIs);
- specialty products, services, and applications; and,
- transaction authorization and settlement.
The discerning organization will of course itemize its relevant costs and quantify return on investment when selecting the particular value-added services that help it to sustain itself and grow in relation to its near-term and long-term requirements.
If you are looking for a merchant services provider, consider some important factors that can affect your selection of the right firm: 1) having the guiding hand of an experienced, professional representative, 2) using a provider known for excellent customer service and, 3) balancing rate and fee issues with the over-all value to your organization of the services provided.