How to Choose the Right Credit Card Processor for Your Small Business

If you run a small business, you know how important it is to choose the right credit card processor. The right credit card processor can help increase your sales, improve customer satisfaction, and streamline cash flow. On the other hand, the wrong credit card processor can cost you money, frustrate your customers, and cause you headaches. According to a survey by TSYS, 75% of consumers prefer to pay with a credit or debit card, and 26% of them are willing to spend more when using a card. That means that having a reliable and secure credit card processor is essential for your business’ success. In this blog post, we’ll help you choose the right processor for your business by covering the following points:

Factors to consider when choosing a credit card processor
Common types of credit card processors
How to compare credit card processors
How to Set Up Your Credit Card Processing System and Start Accepting Payments
How to switch to a new credit card processor

Factors to Consider When Choosing a Credit Card Processor:

Before you choose a processor for your small business, you need to consider some factors that will affect your decision. These factors include:

Fees: How much will you pay per transaction, and what other fees will you incur. Some common fees include monthly fees, setup fees, chargeback fees, or cancellation fees. You want to look for a processor that offers transparent and competitive pricing, and doesn’t charge you hidden or unnecessary fees.
Security: How secure is the credit card processor? What measures do they take to protect your and your customers’ data from fraud and theft? You want to look for a processor that complies with the Payment Card Industry Data Security Standard (PCI DSS), and uses encryption, tokenization, and other security features to safeguard your transactions.
Compatibility: How compatible is the credit card processor with your existing hardware, software, and business processes? You want to look for a processor that integrates seamlessly with the current tools that you use to run your business. Keep in mind, many processors will require you to purchase some equipment to use their processing.
Customer service: How responsive and helpful is the credit card processor’s customer service team? How easy is it to reach them when you need support? You want to look for a processor that offers local technical support, 24/7 availability, and multiple channels of communication, such as phone, email, or chat.
Features: What features does the credit card processor offer to enhance your payment experience? This include online payment options, mobile payment options, recurring billing, invoicing, reporting, analytics, or loyalty programs. You want to look for a processor that offers features that suit your business needs and goals, and that can help you grow your customer base and revenue.

Common Types of Credit Card Processors:

Once you’ve considered the factors that’ll influence processor choice, understand the common types of processors that are available for businesses.

These types include:

Merchant account providers:

These are traditional processors that provide you with a merchant account- a bank account that allows you to accept credit and debit card payments. Merchant account providers usually charge you a percentage of each transaction, plus a fixed fee per transaction, and sometimes other fees as well. They also require you to sign a contract, which can lock you in for a certain period of time. Merchant account providers offer high security, reliability, and compatibility, but they can also be expensive and inflexible.

Payment service providers:

These are online platforms that allow you to accept credit and debit card payments without a merchant account. Payment service providers usually charge you a flat percentage of each transaction, and sometimes a fixed fee per transaction as well. They do not require you to sign a contract, which gives you more flexibility and freedom. Payment service providers offer low cost, convenience, and ease of use, but they can also be less secure, less compatible, and less stable than merchant account providers.

Mobile payment apps:

These are applications that allow you to accept card payments using your mobile device. Mobile payment apps usually charge you a flat percentage of each transaction, and sometimes a fixed fee per transaction as well. They do not require you to sign a contract, which gives you more flexibility and freedom. Mobile payment apps offer mobility, simplicity, and accessibility, but they can also be less secure, compatible, and feature-rich than merchant account providers or payment service providers.

All-inclusive companies for multi-platform businesses:

These are processors that offer a comprehensive solution for businesses that need to accept payments in multiple ways, such as in-person at retail stores, online, over the phone, or by mail order. All-inclusive companies usually charge you a flat rate or an interchange-plus rate for each transaction, depending on the payment method. They do not require you to sign a contract, which gives you more flexibility and freedom. All-inclusive companies offer convenience, versatility, and integration, but they can also be more expensive and complex than other types of processors. Some examples of all-inclusive companies are All Business Solutions, Square Point of Sale, Clover, and Shopify.

How to Compare Credit Card Processors:

Now that you have learned what factors to consider and the types of processors, you need to know how to compare different processors and find the best one for your business. Here are some practical steps or guidelines to help you with this process:

Identify your business needs and goals: What kind of payments do you want to accept? How often do you want to accept them? How much you can afford to pay for them? What features do you need or want to enhance your payment experience? This will help you narrow down your options and focus on the credit card processors that match your criteria.
Research and compare different processors: Use online sources or tools to help you find and compare different based on their fees, security, compatibility, customer service, and features. Some examples of these sources or tools are online reviews, ratings, testimonials, or comparison websites. You can also ask for referrals or recommendations from other small business owners in your industry or network.
Test and evaluate different processors: Once you have a shortlist of processors that interest you, you can test and evaluate them by signing up for a free trial, requesting a demo, or contacting their sales or support team. This will help you get a firsthand experience of how they work, perform, and treat you as a customer. You can also ask them any questions or concerns you may have about their service or product.

How to Set Up Your Credit Card Processing System and Start Accepting Payments:

You may think that setting up your payment processing system is a complex and daunting task, but it is surprisingly simple. In fact, you can do it in a few easy steps, and enjoy the benefits of accepting cards. Here are some of the benefits of accepting credit card payments:

Increase sales by offering more payment options to your customers, and by reaching more customers online or on mobile devices.
Improve your customer satisfaction by providing a fast, convenient, and secure payment experience, and by reducing the risk of errors or disputes.
Streamline your cash flow by getting paid faster and easier, and by reducing the hassle of handling cash or checks.

So how do you set up your credit card processing system and start accepting payments?

Here are some steps to follow:

Choose a credit card processor that suits your business needs and goals.

As mentioned in previous paragraphs, there are different types of processors, such as merchant account providers, payment service providers, and mobile payment apps. Compare their fees, security, compatibility, customer service, and features, and find the one that works best for you.

Apply for a merchant account or a payment service account with your credit card processor.

Depending on the type of processor you choose, you may need to apply for a merchant or payment service account. A merchant account is a bank account that allows you to accept card payments. A payment service account is an online platform allowing you to accept credit and debit card payments without a merchant account. You will need to provide some information about your business and your bank account, and undergo some verification and approval processes.

Get the necessary hardware and software for your credit card processing system.

Depending on the type of processor you choose, you may need to get some hardware and software for your credit card processing system. For example, you may need a terminal, a reader, a point-of-sale system, or an online payment gateway. These devices/platforms allow you to accept and process credit and debit card payments.

Test your credit card processing system and make sure it works properly and securely.

Before accepting payments from your customers, test your payment system to verify it works properly and securely. You can do this by making some test transactions with your own cards or with some dummy cards provided by your processor. You need to check if the transactions are processed correctly and quickly, if the receipts are generated and sent correctly, if the funds are deposited into your bank account correctly, and if the security features are working properly.

Promote your credit card payment options to your customers and encourage them to use them.

Once you’ve set up your system and start accepting payments, promote your payment options to your customers. You can do this by displaying signs or stickers that show the logos of the cards you accept. You can also update your website or social media with information about your payment options, or offer discounts for using cards instead of cash or checks. Additionally you should educate your customers about the benefits of using cards.

Depending on the processor that you choose, many of these steps above will be completed by the processing company, saving you even more time and money. Make sure you choose a processor that will work with you to set up your accounts so that you can start saving money immediately.

How to Switch to a New Credit Card Processor:

If you’re not satisfied with your current processor, or you received a better offer, you may want to switch. However, switching to a new processor can be a challenging and risky process, as it can involve breaking contracts, paying fees, transferring data, and changing systems. That’s why you need to know how to switch to a new processor safely and smoothly.

Here are some tips or precautions to help you with this process:

Review your current contract and fees.

Before you switch to a new processor, review your current contract and fees with your old processor. Check for obligations or commitments that prevent you from switching, such as a minimum term, an early termination fee, or an equipment lease. You also need to check if you have any benefits or incentives that encourage you to stay, such as a loyalty discount, a referral bonus, or a cash back program. Weigh the pros and cons of switching versus staying, and decide what’s worth it.

Research and compare different credit card processors.

Once you’ve decided to switch to a new processor, research and compare different processors that suit your business needs and goals. Compare their fees, security, compatibility, customer service, and features, and find the best one for you. There are online sources to help you find and compare different processors, such as online reviews, ratings, testimonials, or comparison websites. Additionally, you can ask for referrals or recommendations from business owners in your industry or network.

Apply for a new merchant account or payment service account.

After you’ve chosen a new processor, apply for a new merchant account or payment service account with them. Depending on the processor you choose, you may need to apply for a merchant account or a payment service account. A merchant account is a bank account that allows you to accept credit and debit card payments. A payment service account is an online platform that allows you to accept credit and debit card payments without a merchant account. You’ll need to provide some information about your business and your bank account, and undergo some verification and approval processes. Some credit card processing companies will do this part for you.

Get the necessary hardware and software for your new credit card processing system.

After applying for a new merchant or payment service account, get the necessary hardware and software to accept payments. Depending on the type of processor you choose, you may need to get some hardware and software. For example, you may need a terminal, a reader, a point-of-sale system, or an online payment gateway. These are the devices or platforms that allow you to accept and process card payments from your customers. You’ll need to connect them to your new merchant or payment service account, and configure them according to your preferences.

Transfer your data and cancel your old service.

After you have set up your new credit card processing system, transfer your data and cancel your old service. Transfer data such as customer information, transaction history, receipts, and reports from your old system to your new system. Cancel your service with your old processor by notifying them of your decision, paying outstanding fees, returning equipment, and closing your account.

Conclusion and How All Business Solutions Can Help:

In this blog post, we’ve helped you choose the right processor for your business by covering the following points:

Factors to consider when choosing a credit card processor
Common types of credit card processors
How to compare credit card processors
How to set up your credit card processing system and start accepting payments
How to optimize your credit card processing fees and save money
How to switch to a new credit card processor

Choosing the right processor for your business can make a big difference in your sales, customer satisfaction, and cash flow. That’s why you need to research and compare your options to find the best fit for your needs and goals. All Business Solutions condenses these steps into three simple steps to save business owners time and energy. 1. Schedule a consultation. 2. Our experts recommend the best technology and credit card processing methods, and you determine if we are a good fit. 3. Sign up and start accepting payments as soon as possible. Schedule your consultation today to skip the long process of finding a new payment processor.