What do the top credit card processors all have in common? They help small businesses thrive. But with so many options on the market, it helps to know what you should look for before choosing a payment processor.
Keep these four factors in mind while navigating credit card processing for small business.
No matter which credit card processor you choose, you'll have to complete an application. Fortunately, this process is usually quick and easy.
In general, applications are short and may take as little as 15 minutes. You'll submit relevant information about your business. Examples include details like your location and industry.
The most important part of the application process is risk assessment. In the eyes of credit card processors, certain industries riskier than others. Your business' risk level will impact rates and fees.
Most common businesses represent relatively low risk. But examples of high risk businesses include:
In some cases, businesses may be considered too risky to qualify. Examples of these high risk businesses include:
The good news is that you won't have to wait long for an answer. Many payment processors evaluate applications within a few days. Some can even respond within 24 hours.
In most cases, credit card processing for small business provides much-needed convenience. But what if things don't work out? You might be confident about your payment processor today. But you should carefully review your contract to learn what will happen if things change.
Breaking a payment processor contract is similar to breaking a lease. If you end your contract early, you may be responsible for an early termination fee. There are two main types of early termination fees:
A contract that includes liquidation damages may be costly. If you sign this type of contract, you will be responsible for the amount of revenue the processor projects it would lose due to early termination.
In some cases, business owners will be personally responsible for this lost revenue. This is true even if their business closes permanently.
By comparison, some contracts state a flat fee for cancelled contracts. This transparency can help small businesses make future plans.
There is no right or wrong way to approach your payment processing contract. But knowing your options can help you make an informed choice.
When a customer swipes their credit card, the transaction won't be processed immediately. Instead, many merchants choose to batch transactions. This process is known as batch credit card processing.
Most merchants process all authorized credit card transactions once per day. This usually occurs at a fixed time of day, such as the close of business.
Sometimes, merchants choose this time themselves. In other cases, your credit card processor may set a time.
Once the day's sales have concluded, merchants send all credit card transactions to the bank. This begins the authorization process that allows funds to be approved and transferred.
So, why batch credit card transactions at all? Most merchants choose this option because banks charge a fee for each batch of transactions. Processing all transactions at once can help avoid unnecessary fees.
When considering credit card processing for small business, batch processing can help reduce costs. Be sure to ask any credit card processor about how they approach batch processing.
While you navigate credit card processing for your small business, don't forget about customer service. Today, there are dozens of ways for companies to approach customer service. You should always be able to reach the right help at the right time.
If you're on a team of visual learners, look for a credit card processor that offers video and email support. Some payment processors offer video demos that can help you troubleshoot common problems on your own. Others can provide step-by-step, screenshot-rich email instructions.
If you're an auditory learner, you may want a payment processor with a phone support line. Being able to call for help can provide much-needed peace of mind.
Finally, if your business spans different time zones, you should look for 24-hour customer service. Chatbots, phone support and in-depth FAQs can all help provide support, no matter what time of day or night.
By thinking about customer support ahead of time, you'll be ready if any issues arise.
With these factors in mind, small businesses can confidently choose the best credit card processing solution for their needs. Want to learn more about credit card processing for small business? Check out our free fact sheet below!