When partnering with a payment processor, you, as a company are putting your clients in
someone else’s hands and it is vital that you ensure those clients are not just adequately taken
care of, but exceptionally serviced.
Most busy business owners can’t tell what the hieroglyphics on merchant statement actually
mean and the processors exploit that. Our hopes is this article can shed some light on the world of processing.
Companies in the credit card processing industry notoriously resort to shady business
practices like charging hidden fees and doing routine margin increases. This will help you learn the differences.
1- What is the Processors Attrition Rate?
While many processors would attest to providing great service and having many satisfied
customers, the numbers don’t lie. What is their attrition rate, or in other words, how many
clients does the processor gain / lose in a given year and or once their contract is up?
If the attrition rate is high but clients are leaving in droves and that is a sign of poor service.
The bitter taste of poor quality is remembered long after the sweet taste of low price is forgotten.
2- Does the Processor have margin increases?
It is standard practice in the payments industry for processors to raise their margins every 6
months each April & October. This allows processors to do two things;
A) To sign accounts they couldn’t get otherwise by efficaciously undercutting the current rate
incurring a loss initially, then insidiously raising rates over time to make up for it at a profit.
And B), To make more and more money off the backs of their existing client base resulting in big
bonuses and sky-scraping company evaluations.
Don’t be fooled by payment processors that just quote lower rates, make sure those rates are
permanently fixed, and get that in writing!
3- Are Their Agreements Term Based?
Nearly all processors make their clients agree to process with them exclusively for a given
period of time. Do not fall victim to this tactic, look for a processor that works
constantly to earn each client’s business and only has true month-to-month agreements.
4- Does The Processor Charge a Termination Fee?
If a business wants to switch processors or change POS systems the vast majority of
processors will charge the merchant a termination fee. This makes for a nightmare when
coupled with routine margin increases, term based agreements, and poor quality of service. Let’s hope you signed the agreement that doesn’t enforce liquidated damages.
5- Does the Processor Lease terminals and POS systems?
Equipment leasing is widely known within the payment processing space as a rip off and scam.
Any company that does that to its customers is knowingly exploiting them for their benefit.
Opting to partner with a processor that refuses to participate in terminal & equipment leasing
will ensure an honest and ethical relationship that benefits your members.
6- Is the Processor equipped with a team that can handle POS and software integrations?
The payment processing industry is rapidly moving towards integrated company management
software and point of sale solutions. If a payment processor does not have a dedicated team
of software engineers that regularly do those integrations, your clients will struggle and be
technologically left behind. This will result in a massive unnecessary headache for the
merchant down the road that should be as easy as putting an already established and
experienced software team to work.
If you are looking to partner with one of the few payment processors that never raises rates,
has virtually no attrition, has a team of expert software engineers, exclusively uses month to
month agreements never charge termination fees and place the needs of the merchants
above its own then you can contact Platinum Payments at 1-866-921-2982