5 Important Questions to Ask a Credit Card Processing Company

online-payments-e1376963537464When starting a new business, business owners will likely decide to accept debit or credit cards, which means they will need to hire a third-party payment processing services company to manage the transactions. Visa and MasterCard hold the lion’s share of the credit and debit card market, but they don’t work with business owners directly. Instead, they outsource their sales and customer service to payment processing service companies. Also known as credit card processing companies, these processors may seem like pointless middlemen, but they play an integral role in the operations of nearly every business today.


Unfortunately, credit card processing companies are well-known for their fees and complex payment schedules, causing much confusion that can easily be avoided by asking a few simple questions. To minimize the confusion and be ready for the intricacies of this complex marketplace, here are five questions that every business owner should ask to ensure that they are receiving the best possible deal.

1. Is there an early termination or cancellation fee?

In an ideal world, a processor would not charge a fee for canceling an account. However, an ideal world doesn’t exist, and many payment processors charge a fee for early service termination. Anyone who finds themselves having to pay a fee for leaving before the expiration of their contract, should not be charged a fee that exceeds $300 to $400. Also, some payment processors may stipulate that they must charge a “liquidated damages” fee. This means that a business owner will be charged for the estimated amount that he or she would have paid if they finished out their contract in full.

2. Will the payment processing company be compatible with the e-commerce shopping cart?

Not all payment processing services will be compatible with the shopping cart of an online store, because some utilize proprietary software to connect to a site’s shopping cart. Due to this, it is necessary to look into this before signing up with a processing company. However, most processors use a large company by the name of Authorize.Net, so this may not be an issue.

3. Do they offer interchange-plus pricing?

If a credit card processing company answers no to this question, then business owners should go elsewhere. Interchange-plus pricing allows businesses to see the exact charges from Visa and MasterCard, plus the additional amount they are paying the processing company. However, if they are tied to a tiered payment system, the fees will be difficult to identify. Depending on the type of card that a customer uses and the processing method, businesses could be charged a fee for each transaction based on one of three different levels. With this type of pricing structure, anyone can easily be overcharged and not even know it.

4. Other than the transaction fees, what other fees are there?

In addition to a small fee for each transaction, credit card processors may also charge annual fees, monthly fees, statement fees, compliance fees, and regulatory fees. These can easily add up, so business owners should make sure to ask about them upfront. Brick and mortar merchants should not pay more than $200 a year in these fees, and e-commerce store owners should not pay more than $300, due to the added fees associated with having an online shopping cart.

5. What type of customer support is available?

A faulty terminal or a customer concern may cause a business to need help from time to time. Therefore, every business should choose a payment processor that provides phone support that is available 24 hours a day, every day of the week.

Lastly, no one should ever opt for leasing a terminal. A new terminal can be purchased for as little as $200, but is not uncommon for new business owners to be talked into leasing a terminal for $129 a month or more. Setting up payment processing services may seem daunting at first, but if the right questions are asked and the fine print is read, businesses can easily secure the right processor at the right price.

To learn more about Skybank Financial credit card processing, give us a call to speak with a Skybank representative at 1-800-718-0446.

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