Three Mistakes Business Owners Make With Their Credit Card Processor
Credit card processing has come a long way since the carbon paper swiping transactions twenty years ago. Today almost every business has a computer on hand to swipe every type of credit card and debit card known to man. The act of paying with a card is so common; many people no longer carry cash in their wallets. Due to these factors, utilizing a credit card processing company is a must for almost every business out there. For such a common business relationship, you would think we would be better at dealing with credit card processing companies and avoiding the pitfalls we find ourselves in. Below are three common mistakes business owners make when using their credit card processing company.
1. A major mistake business owners make with their credit card processing company is not reading the terms and conditions of their contract. Sure, you may have glanced over other terms and conditions regarding your business before, but this should not be one of them. Be on the lookout for any red flags in the contract. Check for upfront fees, penalties, hidden fees, and the like. Credit cards are designed for ease of use, but the multi-billion dollar business behind these cards is cut throat. This is also true for credit card processing companies. If they can find a way to squeeze one more dollar out of you, they will. If you do not understand any part of the terms and conditions, contact a representative to walk you through it. If the terms and conditions are still unclear, contact a third party professional.
2. Be on the lookout for rate fluctuations. Most reputable companies will not spring a new rate on you overnight. This is precisely why reading the terms and conditions are so important. There is nothing more frustrating than paying 1.5% a swipe one day, only to be paying 2.5% the next. If you notice a rate hike which was not in the terms and conditions, contact the company immediately to find out what is going on.
3. Be very vigilant when assessing any additional fees or penalties coming from the company. Again, if the additional expenses are not in the terms and conditions, find out what is going on quickly. For example, say you expanded you product line onto an ecommerce site. There may be steeper rates when dealing with an ecommerce ‘swipe’ versus a brick and mortar ‘swipe,’ be sure to conduct your research carefully and consider if an expansion such as this will affect your profit margin.
Utilizing a credit card processor is simply a necessity in this day and age. Not falling prey to a predatory company is key in stabilizing your bottom line.