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Having the Big Talk: What to Discuss When Choosing a Payment Processor

You’ve started your business and you’re ready to start making, and accepting, money. Unless you’re a cash-only business, which is unadvisable, then you need to hire a payment processor to accept credit card and debit card payments, as well as any other online payments. However, dealing with the confusing payment processing systems can leave you overwhelmed and vulnerable to hidden and bogus fees. Here are some topics you should bring up when choosing your payment processor:

1. Termination fees

What happens if you want or need to cancel your contract early? Ideally, your processor will not charge you for this, but if they do, then the fee should not surpass $200 to $400. Watch out for what is called a “liquidated damages” termination fee in which you are charged for the estimated amount of the full contract, which could deliver quite a blow.

2. Shopping cart compatibility

Not all payment processors are created equal. Some processors may use proprietary software that is not compatible with your website’s shopping cart, rendering both useless. This software is called the “payment gateway” and some firms also offer fairly universal gateways.

3. Interchange-plus pricing

Interchange-plus pricing allows you to see exactly what MasterCard or Visa charges (the interchange fee) and what the payment processor charges for each transaction. This transparency is important, but not all processors offer it. In that case, pick another service provider. A tiered-payment system does not easily identify fees and the fees vary by type of card, how it’s processed, and more. In this structure, processors can overcharge you without you noticing it.

4. Additional fees

In addition to transaction fees, processors often charge monthly fees, regulatory fees, compliance fees, statement fees, and many others. Make sure to ask for all fees before signing on the dotted line and avoid costly surprises.

5. Customer support

You need to know what will happen when things inevitably go wrong. Find a processor that can provide assistance 24/7, and be sure to explore the fees associated with support, as well.

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