How to Choose a Merchant Processor

By Mariah Venus Email Mariah

Whether you are engaging a merchant processor for the first time, looking for a change of processor, or not sure if you SHOULD be looking for a change, the task of finding and choosing a merchant processor can be daunting.  As a business owner, you’re focused on every penny coming through the door. You may think the most important questions to ask a potential merchant processor are about their rates but this is not usually the case!

If you already have a merchant processor, you may have a solicitor promising you better rates --  or maybe you have had an incident that makes you think it’s time to shop for a new processor.  

Knowing these 4 details about your business and your potential merchant processor can help you choose a provider that will deliver more than just a low rate:

What is your sales volume (number of sales), and the dollar value of your transactions?

Some processors offer low rates with a flat fee per transaction, which can be very valuable for a business that does minimal transactions monthly, but at a large dollar value. Others processors offer a slightly higher rate, but with no per transaction fees. Additionally, some providers even require monthly transaction minimums and monthly caps!  If you have a current processor, your monthly statement is a great place to find this info.  If you do not, you will have to estimate the numbers based on your current or projected sales.

Where do you accept payments?

Do you take payments online, offline (retail) and via mobile? If so, it may be more cost effective to stick with one processor who charges a slightly higher rate, than lose time and efficiency dealing with different processors -- and reconciling them all in your accounting. Make sure to ask if your prospective processor can accommodate all of the ways you take or want to take payments.

What are your hours of operation?

There’s nothing worse than having a customer waiting while you are unable to process a sale on their credit card. It’s important that your merchant processor be available when you need them, not just during banking hours. You should ask the processors hours of customer/tech support, and where their support center is located. You should also ask whether you contact them directly or a third party support provider.

How long can you wait to receive your funds?

Many processors can offer lower rates by holding your funds longer and collecting interest income on the "float”. You should understand what their hold time is for your funds, and how that might impact your rate as well as your business.

The choice of merchant processor is an important one for your business.

BKE can help you know what questions to ask, keep you informed of important updates and advise you on what tools will work best for your business.