Choosing the Best Merchant processor

When your business starts to accept credit cards, you must find a merchant processor.  The merchant processor will set up your account and allow you to quickly and easily process credit card transactions.  The issue that many people have when choosing a merchant processor lies in how to find the best one.  There are literally hundreds of options to choose from, and the pricing structures can be complicated, with fees that are not readily apparent.  Plus, a low fee structure is not everything when it comes to a merchant services account; there are other considerations that can bump one service provider above another in your eyes.

First, it is important to find out what the rate structures are.  This may not be the only consideration, but for many it can be definitive.  Compare pricing from a variety of merchant processor options.  Look at the pricing as it pertains to the transaction processing.  Are they offering you a flat rate, 3 tiered systems or 6 tiered systems?  Can they explain their pricing in a way that makes sense?  If the sales people selling you the system can not explain it then it is probably not the best out there.  Get exact descriptions of what cards would fall into which of the pricing tiers, and discuss the percentages with your salesperson.  Find the lowest possible transaction fees, and then start looking at other incidental costs. 

Will they sell you your equipment, or do you have to rent it?  If you must rent it, look at the cost to buy the equipment elsewhere and then look at the rental fee.  Will the rental fee pay off the equipment in two years or less?  If so, then it is rather high, and you may want to discuss other options.  Most credit card machines will last for years or more, so when choosing a merchant processor, be sure to find one that keeps equipment costs low.  You may not be in a position to buy your equipment outright, but ensure that the option is available.  Also discuss the costs for materials.  Most, though not all, credit card machines require paper and possibly ink to run.  When you need to reorder paper, is there a fee associated with it, or is it a free service?  While this cost is possibly the most negligible, many merchant processor companies will provide it free of charge if asked.  However, you must ask the question to find out and ensure that it is part of your contract before signing.  Another consideration is whether or not they charge a monthly fee on top of the transaction fees.  For those that rarely process credit card transactions, a monthly fee could be a considerable portion of their processing fees.

Unrelated to pricing, customer service is also a big consideration.  How reliable is their phone network, and if your system goes down will you be able to easily process cards over the phone?  How quickly will your funds be made available?  These are questions that are directly related to the service end of things.  They may not be as immediately important as the fee structure, but they bear consideration when choosing the best merchant processor.