When it comes to merchant services, it pays to make sure you do your research and pick the best provider for your business. A lot of companies require a contract, which you should see as a huge red flag. Credit card processing contracts are never a good idea since businesses are constantly changing and payment needs can change over time.
Merchant services providers require contracts for a variety of reasons, but the biggest is in order to lock in high rates and make more of a profit and get away with lackluster customer service. All of this means that not only are you not getting the best value for your money as a business owner but you are also stuck in a situation where you are unable to grow with your credit card processing company.
Credit Card Processing Contract Concerns
Here is a breakdown of how these factors have an impact on businesses, and what it means for you as a business owner.
Most merchant services companies rely on the business owner’s lack of knowledge in order to make a larger profit. The credit card processing industry can get very confusing, and business owners are often locked into very high rates simply because they didn’t know there were better options out there.
Payment processing is a necessity when it comes to owning a business. Being locked into poor rates for 3 to 5 years means you are spending needless money that would be doing more work for your business elsewhere.
Once a company has you in a contract, there is nothing you can really do to get out. Merchant services providers know this, and use it to their advantage. Once you sign on the dotted line, you will most likely experience a lack of communication from the company and very lackluster customer service.
When it comes to payment processing, having a strong support system in place is key. Accepting payments is vital to your business, so if something ever goes wrong, 30 minute wait times and third-party support companies are simply unacceptable.
No Room to Grow
What is good for you when you first start out might not be good for you in a year. When you sign a contract for your credit card processing, you run the risk of growing out of your current plan and not having the ability to switch to something more appropriate for your business.
You should not be penalized for your success, and most merchant services providers make a profit as a percentage of your total transactions. Although this might make sense if your volume is low in the early days, the more you process, the more you pay.
Have more questions or concerns regarding your current credit card processing contract? Contact Stax today.