In business, How do you choose your vendors? This is a very important aspect of running your business because the right vendor will help you succeed, the wrong vendor will help you fail.
When it comes to accepting credit cards, it is vital that you choose the right merchant account processor to fit your business. Accepting credit cards and merchant accounts are directly related to your cash flow. Over 60% of commerce in America is completed using some form of electronic payment.
Considerations when evaluating your local bank
If you want to accept credit cards, It’s usually very easy to go into your local bank, open up a checking account and a merchant account. However, your local bank may not be the best place for you to have your merchant account. The majority of local banks today do not handle merchant accounts. They outsource it to Acquirers or ISO’s. This means, when you open a merchant account at your bank, they are really giving you a referral to an organization they use for merchant accounts.
The pro’s on this approach is you won’t have to search for a reputable company yourself and you will feel a sense of security. If my bank says it’s okay, then it must be good.
With your local bank, that’s where the pro’s end. When you enter into a merchant account agreement this way, you rarely negotiate rate, equipment prices, or type of merchant account. You basically take what the bank has negotiated with this merchant account provider. It may be good or it may not be good.
If and or when you have a problem, you cannot call your local bank for assistance, instead you are given an 800 number to a call center where no one knows who you are and frankly, where no one cares about your business. Situations get frustrating really fast and you end up wasting time, money and effort for the simplest things.
It is prudent to consider your local bank for merchant processing. When you do, make sure you find out who the merchant processing company is and research that company by it’s own merits. After all, it is a separate company.
Speak with that merchant processing company and ask about the right merchant account for your business type, negotiate rate, fees, and equipment prices. Find out there policies on funding times, risk management, chargebacks, holds, and timetable when fees are deducted from your account. Make sure you find out about time of contract as well as cancellation fees.
Last but not least, find out about there service. What are there customer service hours? Get there customer service number and call it. What type of reception do you get? Are the customer service reps knowledge? What is the hold time to speak with a Representative? Are you willing to put up with there level of service?
When you have this information, call 5 more merchant account processors and start all over again.
I know it’s a lot of work, but the work you put in now will save you time, money and frustrations later.
