5 Ways to Spot a Trustworthy Payment Processor

The last thing you want after spending all your time and hard-earned money searching for the best card processor is to discover that they don’t actually have your best interests at heart. The payment processing industry isn’t easy to navigate and unfortunately, there are quite a few processors out there that are just in it for the paycheck.

Luckily, we’ve been around the block a few times, and we’ve come up with a list of five tell-tale signs of a good processor. Keep these in mind while searching for your best payments solution:

1. Transparent pricing

Generally, processing pricing structures include percentages, “basis points,” per-transaction charges, monthly costs, and added fees. If it sounds like a lot to take in, you’re correct—it’s especially bad when processors aren’t upfront about their pricing structure, leaving you to helplessly skim through the fine print to understand why they are charging you so much. Luckily, there are only really two pricing concepts that are crucial to understand going into your processor hunt: interchange and markup fees.

Interchange, simply defined, is the cost of completing a transaction. The cost is universally decided on by banks and credit card companies and is identical for every processor out there. There are things that you can do to reduce the amount you pay in interchange, but none of them have much to do with your choice of payments provider.

Markup fees are a little more complex than interchange, unfortunately. They’re the processor margin above cost, and can be priced in any number of ways. These rates are what you’ll negotiate with your card processor, but don’t forget that you’ll also face additional fees for things like PCI compliance, batching, gateway services, and membership fees.

When you’re hunting for a trustworthy processor, your best bet is to look for one that follows the interchange-plus pricing model. This is the most transparent pricing model in the industry because the rates the processor charges are clearly separated from the interchange costs. Although some merchants may recoil when they hear about a monthly membership fee, they’re actually a sign of a transparent processor, and usually offer reduced fees in exchange for your membership.

On the opposite side of the coint, tiered pricing should be avoided at all costs. These processors are straight up predatory, and more often than not charge compounding rates with little explanation.

2. No gimmicky promotions

The payment processing industry has been around a long time, which means there are lots of people out there trying to innovate and change the industry for the better. Unfortunately, there are just as many people out there taking advantage of the complexity of card processing and using it for evil. Okay, maybe they’re not evil, but they definitely aren’t in it to help merchants out.

These ne’er-do-wells come in many forms, but gimmicks are one thing that sets them apart. They always claim to have some new found way to accept payments that’s better for the merchant, when in fact, you’re paying just as much as you did before.

One great example of this is the recent trend of cash discounting. It sounds pleasant enough, but if you’re processor is offering discounts to customers who use cash or surcharging on card purchases, it is a dead giveaway that they aren’t a trustworthy processor.

In the end, gimmicks almost always benefit the processor more than the merchant. They can have negative effects on the customer experience (as cash discounting does), and most tend to sneakily overcharge you for processing in ways your industry knowledge won’t prepare you for. Just avoid them.

3. No high-pressure sales tactics

As confusing and convoluted as it can be, you’ll want to read the fine print of your processing agreement. Failing to do so is just too risky. Salespeople in this industry are compensated by commission, and thus, have a penchant for sneaking in fees and terms that are disadvantageous to the merchant.

Many salespeople will employ high-pressure tactics to prevent you from reading up on these terms. They’ll offer special discounts or additional perks if you sign the contract within a certain time period, and pester you daily if you don’t. Of course, that doesn’t mean that any processor that offers you incentives to sign is covering something up. But if you feel the salesperson is pushing you to sign a contract before you totally understand it, you may want to search elsewhere.

This is a huge business decision—anyone who has gone through this mind-numbing process can tell you this—and you should never be pressured into making that decision before you’re are absolutely certain that the processor is right.

4. No "one-size-fits-all" solutions

Sure, one-size-fits-all sounds great, and it may seem like the most convenient option when you’re in the middle of thousands of processors to choose from. The thing is, one-size-fits-all doesn’t really exist in the payment processing industry, at least not in a way that benefits every type of business. Sometimes these trendy catch-all processors will work amazingly well for you, but it is always worth the extra effort to ensure that all your needs are really being met.

Most of the time, these one-size-fits-all processors force you into specific POS systems or hardware that can be detrimental for your business depending on its size and sales volume. Additionally, you may think you are getting a great deal when the processor gives you their hardware “for free,” but in most cases it is really more of a rental agreement that you will end up paying for in the future. Finally, these types of processors are really only a good fit for small businesses that have no expectation to grow. Because of the way they are priced, they just become too expensive for larger businesses.

5. Dedicated account managers and support teams

Communication with your processor shouldn’t end once you’ve signed the contract, but all too often merchants are onboarded with their processor and left to fend for themselves.  A good, trustworthy processor will have a team of account managers and support personnel available for you for when questions, concerns, and problems inevitably come up. Without them, you’ll spend hours on hold on your processor’s 1-800 line. If your processor doesn’t designate a specific account manager or support team to you when you sign your contract, they don’t have your best interests in mind.

Regardless of where you’re at in the decision-making process, we hope that these tips will help you to find the best payment processor for your business.

If everything still seems too difficult to handle on you own, SwipeSum has built a network of more than 70 trustworthy processing partners. We’re happy to connect you with one that fits your business at the best rate you’ll find anywhere. Click here to get started!