What Is the Cheapest Credit Card Processing for Small Business?
Not enough money. Not enough time. Not enough sales. Not enough employees. The list of problems small business owners could face at any point in time seems endless. As if that’s not enough, they may encounter another obstacle — merchant service credit card processing
. It’s the reason why some business owners shy away from transactions that involve anything beyond cash or checks.
However, credit card processing is not as complicated as it may seem. Besides, credit cards have become the preferred payment method among customers, with online credit card payment and mobile payments
gaining steam quickly. They are not only faster and more secure, but also cheaper. Here are four ways to determine what is the cheapest credit card processing for small business:
Work with a Merchant Service Provider
It may be convenient to just let your bank take care of all your payment processing needs. After all, why look for something else if you can instead rely on a financial institution you already trust with your money? Turns out banks don’t specialize in merchant credit card processing. Instead, they often outsource it to one of the large payment processors and charge you additional fees.
There’s definitely an advantage to working with a merchant services provider, like TransNational. For example, you get a secure merchant account and generally improve your cash flow. But wouldn’t you want to have a say in who and what you pay? By selecting to work with a merchant services provider outright you get more flexibility in terms of making sure the costs and benefits match your expectations.
Go with the Interchange Plus Pricing Model
Another benefit of working with a merchant service provider is the ability to shop around for the best rate. Not all pricing structures were created equal, but you often have to cut through the clutter of obscured terms to understand that.
Traditionally, the most common pricing models are: flat, interchange plus and tiered. The easy part is that most businesses are usually placed on the latter. The hard part is figuring out if your business is among them, because tiered tends to be the most expensive structure. Interchange plus, on the other hand, is much more fair, especially because it limits surcharges and keeps margin above cost constant.
Become PCI Compliant and EMV Enabled
Security should be the top priority for small business, and it shouldn’t be limited just to spotting fake and stolen credit cards or paying attention to unusual purchasing behavior. Over the years, the industry has put certain standards into practice to prevent fraud on a much larger scale, one that can have disastrous financial consequences for small business owners.
One of them is Payment Card Industry (PCI)
Data Security Standard that includes a set of core requirements for handling customer’s card data. A good credit card processor will not only help your small business become PCI compliant, but will also bring up this topic first. If you have questions or are not sure whether your business is already compliant, this PCI Compliance Guide is a good place to start.
In a similar vein, Europay, MasterCard and Visa (EMV
) standard is another rule that became prevalent after the liability shift in 2015. This one deals primarily with equipment and software upgrade that allows merchants to accept chip cards securely. Although not required legally, it’s highly recommended, since your business will otherwise be responsible for any fraudulent transactions made with a chip card.
Avoid Leasing Equipment and Paying Hidden Fees
What is the cheapest credit card processing for small business? It’s the one that doesn’t make you overpay by forcing you into a lease. No matter how strongly your payment service provider may recommend it, leasing equipment is never a good idea. In fact, anyone who tries to persuade you to follow down that path doesn’t do it based on honesty and integrity, but simply wants to make extra money at your expense. Don’t get lured into promises of no startup costs or low monthly payments, and search for another merchant account service provider instead.
Credit card processing is also riddled with hidden fees that can make even the most fair pricing structure break the merchant’s bank after all the additional costs are added. You work hard for your money and deserve transparency, so always make sure your merchant services provider operates on full-disclosure basis.