Merchant Accounts: 5 Things to Know and Watch for Before Signing Up
1. Not all providers are created equal
With the emergence of companies like PayPal and Square, some tend to think they are an equal alternative to a traditional Merchant Processor or Payment Gateway.
Not so. Traditionally a Merchant Processor would provide each of their Merchants with their own account, typically in partnership with a financial institution. But with newer aggregator models, the provider has one merchant account and manages sub-accounts for their merchants. While both allow people or businesses to process payments, they each have their pros and cons, so it would be wise to carefully consider each before making a decision. More on Aggregators vs. Traditional MSPs
2. Be leary of tiered rate structures that only promote the qualified rate
Pricing in this industry can be confusing, so it’s important you ask questions and really understand what you will pay before signing on the dotted line. A promoted “Qualified Rate” will almost always be accompanied by a mid-qual rate and a non-qual rate. Make sure you know how tiers are structured, and what kinds of cards you typically accept to better predict which rate will most affect you. For example, if you take a large portion of check cards, then you can expect to get that wonderful promotional rate, but if you tend to see a lot of business or rewards credit cards, then expect to get that non-qual rate more often than not.
3. Make sure you read the fine print
How long is your contract enforced for? Is there an early-termination fee? Does the contract automatically renew at the end of the term?
4. Look into the service providers compliance status with the PCI-SSC
Regardless of who you work with, the most important consideration is security. Luckily, the PCI-SSC (Payment Card Industry Security Standards Council) makes this easy by certifying MSPs with a leveled grading system based on their transactional volume. Level 4 is the baseline, and works up to level 1, which is the most strict. The stronger your MSPs certification level, the more you can rely on their infrastructure when obtaining your own compliance. You can read more about PCI Compliance here.
5. Ask about their customer support channels
The sales process went smoothly and you got your account all set up, so congratulations, but what happens now if you need help? Often overlooked, this is a consideration we always encourage people to explore when shopping for a new merchant account. Does the provider have easily accessible sales channels? What are they? Can you get help 24/7/365 if you need it?