There are a lot of companies offering credit card processing services these days. Unfortunately, they all have the same sounding sales pitch. “We’ll lower your rates, you’ll pay less, your rates are too high…” etc. They all seem to focus on one specific line item on your rates. It’s usually your “qualified rate”, which they will usually offer for a couple of basis points lower than what you’re currently paying.
Unfortunately, your rate is only part of the picture. In fact, it’s not even the most important part. There’s a big difference, and very little correlation between your rate and how much you pay to process cards. Two businesses can sign a merchant agreement with the same rate but end up paying very different amounts. If you’re shopping for rates, what you should be concerned with is your “effective rate”, not your “qualified rate”. Your effective rate is simply your total cost divided by the total amount that you processed. It includes every line item that you can possibly pay a fee for.
But the point of this post is that we don’t think shopping for rates makes the most sense. In fact, one reason that many people resist switching credit card processors so much is because they’ve done it before and they didn’t see any significant savings, despite the fact that there rates were supposed to be way lower. Sometimes, you’ll sign for lower rates and you could actually end up paying more to process credit cards. That’s why many business owners are so jaded and have so much distrust for credit card processing companies and sales reps.
But, when you’re looking for a processor, you should concern yourself more with what kind of value they can add to your business. A lot of companies out there can process debit and credit transactions for you, and most of them can do it for a similar cost. But you should be willing to pay a small premium for great service. The last thing you want is to lose customers because of a credit card processing malfunction because you couldn’t reach your representative, or because there was no tech support available at that hour.
Also, ask about what kinds of other services they offer. Something that has become pretty popular is gift and loyalty programs. A lot of businesses are also using more advanced point of sale systems. Does your credit card processor offer these services? And if they do, what will you have to pay for them? They could give away the credit card processing for free, but charge you an arm and a leg for another service that they know you’ll need.
With Sure Payments, we’ll always offer you the most competitive rates possible, and we’re second to none when it comes to service. Give us a call to find out more!