Questions to ask when selecting a payment processing vendor

Are you a new business looking for a payment processing company to partner with? Are you confused by which payment processing vendor is the best option for you because they all seem to have good deals or maybe you don’t understand the differences between what they have to offer? If this describes the situation that you are in, then you are in the right place because we are about to help you make sense of most of the information that you need to know about the payment processing vendors that you have to choose. Before you can jump into the deep end and make a choice for a vendor it will be important that you ask some important questions of the different vendors or at least look for the answers from the information packets that they have when they offer you their terms. Finding answers to these questions will help you make a decision that suits your needs. Below are some of the questions that you should ask yourself.

First, before you can ask for the credit card processing services, it is important to understand one thing. When payment processing vendors say that they offer a certain discount rate for the use of Visa, MasterCard ad Amex cards what do they mean? Well, it is easy to think that this discount rate is actually a discount that they offer you but in actual sense, it really is not let me explain. A discount rate is a percentage that the credit card company charges the business owner for the customers to use of the credit card. All payment processing providers charge this fee and it is therefore a matter of determining who charges the lowest discount rate if you want to have the best advantage. For example, if in February you have credit card sales of $1,000 through Visa cards and if your discount rate is 2.5% then you will pay $25 as a discount rate to the payment processing company. The discount rate usually varies from 2.5% to around 5%.

For small business credit card processing is done in several different ways. Some businesses key in credit card information in order to make a sale while others process the sale through online processing. It is important to ask if the payment processing company will charge you different rates for payment processing that is done through swiping versus payment processing that is done through keying in details. Additionally, you need to ask what the transaction rates are because all payment processing companies have different rates for the transactions that they process. A sale made from a point of sale terminal can vary from a sale made online. If you will be offered a point of sale terminal by the payment processing company, will you have to pay a monthly fee for use of the point of sale terminal?