Questions to Ask Your Payment Processor

Whether you want to accept credit or debit cards in a store, online, or using a mobile device, the options are practically limitless. However, identifying the payment processor with the features, services, and prices that are right for your business needs may not be as simple as it seems. Here are some important questions to ask any payment processor you’re considering to support your small business.

What is the fine print associated with low fees?

Payment processors may advertise low transaction fees to gain the attention of small-business owners, but read the fine print to confirm your business will qualify for such fees.

In some cases, payment processors may require that businesses meet a minimum monthly transaction volume to receive the lowest per transaction rates. Consider how much you know about your business and your customers before entering into a payment processor relationship that may cost you more than necessary.

Do fees vary based on the card type or transaction?

When customers don’t present merchants with a physical card to swipe at the point of sale, the risk the card processor absorbs for potential fraud is higher. Subsequently, the fees the payment processor charges merchants for card-not-present transactions (like an online sale) or even transactions that are keyed in by hand are often higher in tandem.

Consider the majority of the transactions you’ll process based on your current business model before you select a payment processor based only on the advertised fee per transaction.

What fees will I pay for refunded transactions?

Regardless of the quality of your product or service, customers will occasionally ask for a refund. While giving the customer the option to return merchandise can help reduce purchase hesitancy and improve your perceived customer service, make sure that your payment processor doesn’t penalize you for offering such satisfaction guarantees.

In some cases, payment processors may keep the fees your business paid when the customer purchased an item, despite the fact your business refunded the money to the customer.

Am I committed to the service?

Before you apply for a merchant account with any payment processor, inquire whether you’re committed to using the service for a specific period of time. While some payment processors do require that customers commit to service contracts (which may also involve early termination penalties) in exchange for low rates, plenty of providers do not.

How soon will I get my money for approved transactions?

Like financial institutions, payment processors vary regarding policies for fund transfers and any applicable fees or restrictions they include. Research the payment processor’s policies for the time and effort involved in funds transfer once transactions are approved, along with your options for redemption.

Some payment processors automatically transfer funds into your bank account (less the transaction processing fees) in as little as 24 to 72 hours from transaction approval.

Others may require that you manually initiate and direct the transfer process before funds are moved to your account. Other providers may offer free redemption only in certain forms of payment (like a prepaid debit card), but will impose additional fees to electronically transfer funds into your bank account or mail a cheque. 

What kind of support do you provide?

Most payment processors offer some kind of customer support — but not all promise the ability to connect with a live customer service representative during your critical business hours.

Consider the hours you conduct business to ensure you have access to your payment processor when and how you need it. If your payment processor’s service is inexplicably disrupted while you’ve got a line of customers at the point of sale ready to pay by credit card, the ability to connect with live, qualified support will prove invaluable.

What currencies and languages do you support?

Some payment processors are equipped to support global transactions and automatically adjust prices and applicable taxes to the appropriate currency based on the buyer’s location. If you intend to sell internationally — even in an online-only environment — select a payment processor that can support global transactions.

There are several payment processors specifically tailored to accommodate small-business owners, but they’re not created equally. Research the prices, policies, and service requirements for any payment processor you consider before assuming it’s a tool that’s a fit for your business.

About The Author

payment processor

Kristen Gramigna is Chief Marketing Officer for BluePay, a credit card processing firm headquartered in Naperville, Illinois. She has more than 20 years of experience in the bankcard industry and has written for, Chief Executive, and Business Insider. Follow her on Twitter here.