7 Overlooked Questions to Ask a Credit Card Processor

(5 minute read)

Credit card processors may look the same from the outside, but once you dig into the details, you quickly realize each processor can be quite a bit different. If you are hunting for a new credit card processor, it is essential to look at all aspects of your relationship from processing terminals to security to monthly reporting.

Getting paid is vital in any business, so you should not rush into a new payment processing relationship without considering the critical details. Don’t hire a new credit card processor until you’ve answered these seven vital questions that any business dealing with credit cards should understand.

1. Do you offer tokenization and EMV

Just a few years ago, no one had heard of Apple Pay. Google Pay didn’t even exist. However, these days virtually every new phone can act as a payment method. Similarly, EMV security chips rose from relative obscurity in the United States to the standard for card present transactions.

If you get a new credit card processor, they should offer options to handle tokenized and chip-enabled transactions. Since October 2015, the merchant is responsible for card fraud if they don’t accept payments with the EMV standard. Your new processor should answer yes to this question.

2. How do you assist with PCI compliance and fraud protection?

Speaking of solutions like tokenization and EMV that protect your customers from fraud, what does your new payment processor do to protect you from fraud? Payment card fraud is projected to exceed $9 billion in 2018. Security always has to be top-of-mind for your payment processor so you don’t have to worry about a breach of your own.

Your payment processor should go beyond supporting tokenized and EMV transactions to include end-to-end encryption and full PCI compliance. Encryption prevents criminal third parties from reading any data they may have been able to intercept as payment data crosses the various payment networks. PCI is the Payment Card Industry Data Security Standard which dictates minimum security standards to avoid payment card fraud.

With an average cost to fix a breach around $100,000, you certainly don’t want to sign up with a processor that doesn’t protect your business from fraud.

3. Do I get dedicated support?

When you call the phone company, cable company, or an airline for customer support, you probably encounter a lousy customer experience. Moreover, if you should somehow get disconnected, you have to start all over with a new customer service representative. It’s frustrating and a colossal waste of time. You should not have these types of issues when you need help from your credit card processor.

Whether you run a winery, medical office, or retail store, you can’t afford extended downtimes, equipment errors, and lost business. Your credit card processor should give you direct access to dedicated support that is familiar with your business needs and will stick with you until any issues are resolved.

4. Are statements and reporting transparent?

Payment processing involves lots of numbers, but reading your monthly statements should not feel like reading a complicated medical bill. All statements and reports should clearly lay out payments processed and a break down of all fees that clearly shows how your charges came together.

Some payment processors may try to muddy up your view into how they make money by reporting fees as a lump sum or adding unnecessary complexity to statements. Your new payment processor should be able to explain how their reports and statements work and show examples that clearly show how funds moved with complete transparency.

5. Will my rates ever be raised?

It is reasonable to expect costs to rise over time with inflation, but when you are charged based on a percentage of payment volume, your payment processing costs go up with your pricing.
Payment processors do not have to raise rates to keep up. They can guarantee their rates at a fixed percentage that never goes up. However, that doesn’t mean every payment processor follows those guidelines.

Unfortunately, raised rates and hidden fee pass through unnoticed by a lot of businesses. Some processors will format their statements in a way that makes it difficult to catch extra costs that were never discussed in the first place.

A great way to uncover hidden fees and confirm if your rates have been raised is a 3rd party rate review. It’s standard for other processors look at your statements and help you pinpoint the discrepancies.

6. Can I purchase my terminals?

If you run a business with a physical location and need to process card-present payments, you need a payment processing terminal. While some card readers are built right into a larger POS (point of sales) system, in many cases it makes more sense to keep a separate terminal for card transactions.

Some payment processors may require you to rent the terminal or pay a monthly terminal leasing fee. The best payment processors give you a choice between renting or buying your preferred terminal. Over the years, the savings from owning your own terminals can add up.

7. Is there a long-term contract?

Some payment service providers try to keep their customers from leaving by locking them into long-term contracts. Even one year in a contract can be too long. Your business needs and the overall payment landscape could change and you may need to shift from your current payment solution. You don’t want to be stuck with a processor who cannot scale with your business.

Your card payment processor should not require you to sign any long-term contract. If you run into enough problems or find a better solution, you should have the freedom to leave with no penalties.

Got more questions? 

This is not an exhaustive list of questions for a new payment processor. In fact, reading this list may have led you to even more questions about your payment costs and options.

That’s a good thing!

If you have more questions and would like to see how Preferred Payments can give you a better payment experience, request a Free Rate Review with our team.

Rate Reviews give you a clear understanding of what you’re paying now through your current processor (we’ll uncover any hidden fees), what improvements can be made to your payment system and how Preferred Payments can enhance both your pricing and overall experience.