It’s becoming increasingly common for many businesses to offer credit card processing as customers increasingly demand and expect this as a way to pay for goods and services. As a result, it becomes important for a business to know the many ins and outs of credit card processing to avoid the pitfalls they may encounter.
- There are no free merchant accounts –
Economists like to say there is no such thing as a free lunch. Quite simply put they are trying to explain the concept of opportunity cost in to get something you have to give up something. Free merchant accounts act the same way in that businesses always have to pay processing rate (sometimes at a higher than normal amount) for a “free” merchant account.
- PCI is not only smart, it’s required –
Payment Card Industry Data Security Standard (PCI DSS) quite simply known as PCI are the payments industry security standards everyone involved in processing payments must adhere to. They are simply a set of guidelines to prevent and minimize security breaches by unauthorized individuals. Should a business not be PCI compliant and a breach occurs then they may be held liable, face fines, and even lose their merchant account leaving them unable to processing credit cards which can cause them to lose customers.
- Avoid too good to be true rates –
Unfortunately, some merchant services companies use bait and switch tactics to lure customers. They may advertise rates that may be well below the Interchange rate which may seem very attractive to merchants. However, this may simply be used as a marketing tactic to get the phones to ring where their sales people sell them on a higher rate then what was advertised.
- Learn how to prevent chargebacks –
Sometimes during a payment transaction a customer may try to force a situation in which they demand their money back. In a best case scenario, this may still prove to be very costly and a time consuming processing for a merchant. Be proactive and implement practices and policies to prevent chargebacks before they occur.
- Make sure you understand your statements –
A merchant’s statement gives them a great overview of the funds they processed and received in a given period. Knowing what these statements say is important so your business receives every dollar it deserves. In addition, rate increases are usually communicated via statements. Make sure your read every page to understand any item that may effect your business.
The tips listed above will help your business more effectively handle credit card processing and avoid any pitfalls that may be associated with it.