How to choose a merchant account provider

It’s technically possible to sustain a business on cash-based sales alone. Though at a time when fewer Americans carry paper money in their wallets, your growth prospects may remain limited if you don’t offer the payment options that customers prefer using.

This is where a merchant account provider can help.

Also known as merchant services providers, these are the organizations that help you establish  a special type of business bank account, known as a merchant account, that enables you to securely accept a range of electronic payments – including credit, debit, gift, and loyalty cards.

However, not all merchant account providers are created equally. Before committing to one provider over another, it’s important to invest ample research to avoid any data migration hassles and possible early termination fees.

How to choose a merchant account provider for your business

Below are the five important areas you should research when deciding how to choose a merchant services provider.

1. Payment security

Payment security is a critical decision factor when interviewing merchant account providers. That’s because fraud and data breaches can lead to:

• Out-of-pocket losses

• Punitive fines and damages

• Litigation and legal fees

• Diminished consumer confidence

To minimize these risks, it’s important to only work with PCI-compliant payment providers that specialize in advanced fraud protection – including tokenization, encryption, hosted payment forms, and even fraud management tools.

2. Payment expandability

You might be a brick-and-mortar merchant today, but what happens when you decide to move your inventory online?

Or vice versa?

It’s difficult to know what your business plans will be in the future. Choosing a merchant account provider that supports many payment technologies allows you to scale your business over time.

Be sure to choose a payment processor that specializes in:

• All the payment channels you might need one day, including point-of-sale (POS) systems, online payment gateways, virtual terminals, and mobile credit card processing

• All the payment types users might want, including credit cards, debit cards, gift cards, ACH, eCheck, Apple Pay® and Google Pay®

3. Payment integration

Payment integration is another important factor when deciding how to choose a merchant services provider for your business. Integration allows your existing accounting or business management software to automatically import any incoming sales – without you having to manually enter this data. Payment integration saves time and provides more accurate recordkeeping than you would get if balancing books by hand.

Check with the provider to ensure its payment processing technology is compatible not only with your software, but with your hardware, as well.

4. Payment contracts

Almost every payment processor has some type of merchant account contract. Before signing the dotted line, you need to get answers to the following questions:

• What is the contract length? Are you required to sign a multi-year contract? If you decide to change providers before the contract is over, will you have to pay early termination fees?

• Are you expected to buy payment processing equipment such as POS terminals, or can you lease them instead?

• Do you know exactly how much you’ll pay in processing fees? Aside from cancellation and processing fees, are there any other charges that may apply?

Are there any volume caps, sales quotas, or other limitations, or are you allowed a minimum or maximum amount of transactions?

5. Payment support

Be sure to partner with a merchant account provider that offers 24/7 customer support – available by phone, email, or even chat. Especially if you’re an eCommerce business, your store is open all the time.

In the event of any issues that may crop up in the middle of the night, you want to be able to troubleshoot the problem as quickly as possible.

Other questions to ask a merchant account provider

Here are some additional questions you may want to consider as you research merchant account providers:

• How long has the provider been in business?
• What is the average processing time for funds?
• Does the provider have references?
• Why should you work with that provider?

Learn more about our merchant account services

To discover how our PCI-compliant payment solutions can help protect your customers, save you time, and grow your business, contact our team today.

Editorial Team

Guides, Payments & processing, Start a small business

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