Check / Money Order
Leaders Merchant Services
Most Commonly Asked Questions about Credit Card Processing
Businesses looking for the best credit card processing services with the best credit card processing rates can get started right here with answers to the most commonly asked questions. Find out more about available features, pricing, and fees, choosing the best credit card processing company and more with the most frequently asked questions below.
What Are Some Important Features of Credit Card Processing?
Merchants have many options for credit card processing beyond a standard payment terminal that ensures enhanced security and flexible payment. When comparing the best credit card processing companies, ensure you look for modernized key features such as:
- Mobile processing
- NFC payments (when customers can make a payment by holding up their phone to the reader)
- R code payments (payment via QR scanner)
- EMV chips (the global standard for credit and debit payment cards based on chip card technology that improves security)
- Marketing offers at point-of-sale
- Mobile marketing offered via SMS
- Payment method coverage (ensure your credit card processor accepts all, or most, forms of cards to avoid disappointing your customers)
These important features will most likely only be available on POS which offers advanced functions such as mobile payments and security against fraud.
What Does ‘Tiered-Pricing’ Mean?
Used by many credit card processing companies, tiered-pricing defines a price per unit within a range meaning that the credit card processing service will charge different fee levels for each transaction. For example, a company may charge more for an airline credit card than for a standard credit card. Some businesses do not prefer tiered-pricing as they find it difficult to track different fees. Typically credit card processing companies break down fee levels according to the following with different rates for credit and debit cards:
Qualified Discount Rate: ~1%
Mid-Qualified Discount Rate: ~2%
Non-Qualified Discount Rate: ~3%
Tiered-pricing allows processors to group interchange fees into these three separate tiers which give a clear statement of all fees. However, this method of pricing is often expensive and includes many hidden fees.
What is Interchange-Pricing?
Interchange-pricing, another pricing system used by credit card processors, typically incorporates two credit card processing rates from the company: the interchange markup fee and the transaction fee. With interchange-pricing, merchants pay a flat fee plus a small fee for each transaction.
For example, a company may charge a merchant a 0.30% rate and a $0.15 transaction fee. In that case, the business will pay the wholesale interchange fee, plus 0.30%, plus 15 cents. Businesses may prefer the consistency of interchange pricing.
How Do I Choose the Best Credit Card Processing Company?
Selecting the best credit card processing company will vary depending on your purpose. From receiving credit card payments via a terminal in your store to selling products on your online site. However, there are some key elements to consider which you should look for in all companies:
- Transparency – Ensure that there are no hidden fees and you are aware of all costs and payments.
- No long term commitment – You should look for a month to month contract which allows you to change monthly, for any reason. You may receive a better deal elsewhere and wish to switch. This gives you the flexibility to do so without waiting for a yearly contract to end or paying a huge early cancellation fee.
- Comparison shopping – Always have a look around and compare several companies to search for value and savings. Some companies are willing to waive certain fees for you if you are thinking about starting a contract with them, so always ask. However, when choosing the top credit card processors you should always evaluate the quality of the service in comparison to the price. Some companies may offer free bonuses, although ensure you are clear on the terms and conditions of this. You don’t want to end up having any extra costs.
A great way to assist your decision when searching for the top credit card processing companies is to read others experiences online such as credit card processing reviews on Facebook or Best Business Bureau. This allows you to get honest, unbiased feedback from those who have already used the service.
What Fees are Involved with Credit Card Processing?
When considering the most affordable credit card processing company, you should consider all the fees included in the package such as the cost of a terminal or other equipment needed. Credit card processing businesses take a percentage of any sale processed via this payment method. This will vary depending on which supplier you are with. Additionally, on top of each transaction fee, you pay monthly fees for using a company’s service. Also, you may need to pay incidental fees if a customer tries to process a payment that is declined due to insufficient funds or a charge back occurs.
Features and Factors to Consider When Choosing a Payment Gateway
1. PROCESSING THE FULL RANGE OF PAYMENT TYPES
Not all payment gateways support every type of payment. Understand the types of payments that your customers need to accept, whether only debit and credit cards or also ACH and e-checks, then make sure the payment gateway provider you are considering as a partner enables them.
2. MODULAR DESIGN
While you want to choose a payment gateway with a full-featured offering, not every business needs every feature. A payment gateway with a modular architecture enables your customers to choose a comprehensive omnichannel payment solution or only the features they want, à la carte. An added benefit to a solution with this design is that if the merchant’s needs change over time, such as adapting from card-present to online sales during the COVID-19 pandemic, they can add or subtract features, unlike gateways with a take-or-leave-it feature set.
Leading payment gateway providers offer integration with a wide range of payment processors, third-party solutions such as online shopping carts and gift cards, and value-added services, such as loyalty rewards, marketing integration and customer surveys. Make sure the functionality that your customers need is on the payment gateway’s integration partners list.
4. DEVICE OPTIONS AND MANAGEMENT
Research the payment devices your customers will be able to use, including countertop card readers, mobile devices and multilane devices, and take note of the vendors that provide the product lines and their price structures. It’s also important to understand what their device management looks like and if they support remote updates.
5. SECURITY AND PCI COMPLIANCE
Payment security is a necessity to protect your customers’ businesses as well as consumers’ accounts. Investigate the payment gateway’s Payment Card Industry (PCI) certifications and the measures they take, such as tokenization of stored information, to keep payment data safe.
6. ANALYTICS AND REPORTING
Merchants have discovered the power of data, both to inform decisions about internal operations and to build a 360-degree view of their customers that can help them influence purchases and increase marketing ROI. Ensure your customers can access their payment data so that they can use it to operate more strategically and competitively.
7. CROSS-BORDER PAYMENTS
Depending on your customers’ location or whether they do business in multiple countries, they may require their payment gateway to enable cross-border payments. In addition to accommodating payment card regulations in different regions and foreign transaction fees, the payment interface should also adapt to consumers’ language and currency.
Payment gateways can assess fees in different ways. Some charge by transaction; others charge a monthly fee plus a transaction fee. There may also be additional fees for services such as invoicing or fraud. Also, fees may vary depending on the types of merchant category your customers fall into. It’s vital to develop a complete picture of costs for your customers to avoid surprises and prevent harm to your relationship.
9. WHITE-LABELED SOLUTIONS
When choosing a payment gateway, don’t limit your investigation only to features that benefit your customer. Also consider the advantages the partnership will offer your business. One extremely valuable feature for ISOs is the ability to brand the payment solution with your logo and access it from your website. This noncompetitive approach to partnering with a payment gateway provider can help you protect your accounts and minimize churn.
10. TOTAL CONTROL AND MANAGEMENT OVER YOUR RESELLER AND MERCHANT PORTFOLIO
You, not the payment gateway provider, should have control of your accounts and how you sell services. When choosing a payment gateway partner, make sure you fully understand the terms of the relationship, including who is responsible for onboarding, billing, SSL certificate management, and customer support.