As you know, credit card processing firms are chiefly engaged in processing credit card transactions. They are typically in charge of the acquiring banks of business people. They are essentially liaisons between credit card issuers, banks and merchants, and may provide added services to small businesses, like fraud control.
In general, there are two types of payment processors nowadays, namely, frontend and backend.
Frontend processors typically handle debit card and credit card authorizations. On the other hand, backend processors get in touch with credit card issuers on the last (or settlement) stage of the process. In some cases, a company performs both frontend and backend processing. And they can also be specific to certain business types, like online shops or mobile vendors.
If you’re a small business owner who has so much on your plate already, it could be tempting to pick the first processing company that comes your way.
But if you want to be sure about choosing a company that will become an asset instead of a liability, you need to take your time making a few vital considerations.
For example, you’ll want to know how a particular processor takes care of customer issues. Reputable credit card companies are always ready to help small businesses grow, becoming their business partners over time.
If a processor has a poor reputation in terms of handling credit card disputes, you should look for another prospect.
Another important factor to look into the cost that goes with using certain credit card processor. In addition, apart from per-transaction fees, there may also be fees to be paid when a merchant sets up a payment processing service, receives monthly statements or terminates the contract before it is due to expire.
If a credit card processor offers a payment gateway, a server that allows a merchant to connect to various payment applications and communicate with card issuers and banks, there will probably an extra fee to pay.
Not to mention you need to compare different companies’ pricing models. An interchange pricing model is a good one because it explicitly lists all the charges that must be paid, giving you the predictability you need to manage your costs and budget better.
Before actually going with a certain processor, find out whether it will take all types of payment used by your customers, including mobile payments. You don’t need a processor that will put a cap on how many transactions you can have every month.
If you look around, you can easily see the huge lot of credit card processors nowadays, but of course, they’re not all created equal. By going through the above considerations, making a smart choice will become a lot simpler.