25 Mistakes Businesses Make When Starting to Accept Credit Cards

When it comes to getting paid for your produces or services, there are few alternatives that top credit cards. That’s because accepting credit cards growths profitability, stops you competitive, and are quick and easy to set-up. Credit posters are also the preferred payment method of customers. In fact, the triennial Federal Reserve Payments Study( FRPS) found that, “Total card remittances stretched from 103.5 billion with a importance of $5.65 trillion in 2015 to 111.1 billion with a significance of $5.98 trillion in 2016. ” At the same time, when starting to accept credit cards there are corrects that you should be aware of. If not, admitting placards will end-up being a costly endeavor that could hurt your business for years to come.

Mistakes When Starting to Accept Credit Cards

To prevent that from happening here are 25 missteps that the companies that you need to avoid when starting to accept credit cards.

1. Not taking the time to shop for the right fee processor.

Not all payment processors are the same. That’s because each processor offers unique peculiarities. For example, if “youre running” a brick and mortar business you’ll need hardware like POS terminal. If you treat fees remotely you’ll need a virtual terminal or portable poster reader.

In other commands, the first step you need to take is to determine how you’re going to process remittances, your customer’s advantages, and the needs of your business. After you’ve narrowed down your selection of processors that are suitable your business, you then need to compare the rates, fees, and expressions of each.

This may be a lengthy process, but it will be beneficial for your business in the long-run since it will eliminate future problems.

2. Choosing the processor with the lowest rate.

Obviously you want to work with a processor with the lowest rate possible. The thing is, the processor with the lowest rate doesn’t always have the lowest cost. In fact, processors offering the lowest rate tend to be the most expensive overall.

For example, if only we quoted a rate of 1.59 percent, you may end-up actually compensating 3 percent formerly you start processing payment. The conclude? It was a bait-and-switch tactic.

The processor knew you would sign-up for such an affordable charge. However, you didn’t take into account that low proportion pertained a small portion of your deals. Remember, when you handles payments the total processing cost consists of three separate components: the processor’s cost, the bank’s cost, and the credit card companies’ cost. This means that the total cost is not prescribed alone by a processor’s rate.

This can get a little confusing, so I propose you review this disturbance of credit card processing fees for brokers.

3. Failing to realize that accepting credit cards comes with likelihoods.

There’s a misconception that as a shopkeeper it’s your freedom to accept credit cards. The actuality is that for some business owners, such as online brokers or those classified as high-risk, there’s hazard to become involved in allowing you to accept credit cards.

For example, for online patrons, they have six-months to feud a charge. That means that you’re borrowing this revenue until that six-month period has lapsed. If you’re not prudent, they could do some serious damage to your cash flow.

4. Settling for impersonal, blind email foundation.

What happens when you have a question about billing or a technical issues? You’ll need to talk to an actual support staff member to address the question or concern.

If your processor doesn’t have 24/7 approval, then make sure that they have a ticket system. This space your questions or controversies are registered and you don’t have to constantly repeat yourself when you do speak with an actual person.

5. Ignoring volume requirements.

One benefit of collaboration with a third party processor is that you won’t get hit with outrageous set up and recurring rewards if your business procedures a small volume of deals each month.

However, the amount of business and dollar sums will change the terms and charges associated with third party credit card processing. Make sure that the processor you work with doesn’t have any minimum or maximum work commitments that could affect your frequencies and fees.

6. Leasing your terminals and paying a monthly fee.

I’m sure that a sales rep will try to convince you that you’re better offer to lease their hardware and settle a monthly fee. They’ll claim that it’s more cheap and protects you from places like if the gear breaks.

That’s baloney.

It’s frequently much cheaper to actually purchase credit card equipment. Instead of drooping $50 – $100 per month, you can buy a machine for around $300. There’s likewise free options like the Square card reader.

Furthermore, when avoid leasing rig you avoid having to pay for equipment insurance and aren’t stuck being in a contract for the next several years.

7. Not predicting the fine print on your processing agreement.

Research has found that 73 percent of us don’t predicted the fine print when signing up online. Even if you do read the terms and conditions, precisely 17 percent of us understand them.

Before signing up, take the time to read the small print so that you’re aware of charges like πŸ˜› TAGEND

Set up fees. Discount charges. Address verification fees. Ongoing fees for a payment gateway.

You too want to look for termination fees or any other hidden. If you’re unsure, question either the processor or someone who is familiar with credit card contracts like a fellow business owned or purchaser statute expert.

8. Ignoring Payment Card Industry Data Security Standard( PCI DSS) conformity.

PCI DSS is a plan of security requirements that have been established to protect cardholders’ account data from fraud. The PCI DSS were developed by the PCI Security Standards Council and includes American Express, Discover, MasterCard, Visa, and JCB International.

As a business owner, these standards require that all hardware and software that disseminates a cardholders’ data must be compliant. If not, you’ll face big fines, a loss of reputation, and affair bankruptcy.

You can speak the entire PCI DSS here, but you should also discuss this with your processor to determine your compliance level.

9. Falling into the bundled pricing trap.

“With wrap pricing a processor compensates exchange costs to banks and assessment fees to placard symbols on behalf of a business. The processor then accuses the business based on its own launch of modified, mid-qualified and non-qualified proportions, ” writes Ben Dwyer over at CardFellows.

As Due’s Angel Ruth further explains, “To construct things even more baffling, these prices are not standard across all processors.” But, this is typically how a bundled or tiered pricing representation would look like πŸ˜› TAGEND

Qualified: 1.59 percent+ $0.05 for all card swipes. Mid-Qualified: 2.00 percentage+ $0.10 for all events involving a payoffs or non-major credit card. Non-Qualified: 2.59 percentage+ $0.15 for all keyed-in events and all transactions that do not fit the criteria of your processor.

“The main issue with this model is that you may be given a too-good-to-be-true rate, ” adds Angela. “That’s for merchants who fall into the qualified tier. Most transactions fall into the mid- and non-qualified tiers.

“To make matters worse, the criteria and paces for each of these tiers are subjective, so is not simply are you now more fund, you may have no way in order to be allowed to rectify the matter.”

As if that weren’t bad enough, its organizational structure procreates it impossible to “accurately compare proportions among processors.”

Ultimately, tiered pricing is expensive, incoherent, and less transparent, Unfortunately, there isn’t much to do about this except to educate yourself, critique your statements, and contact your processor to see if the criteria has changed.

The good word is that you can work with a processor that offers a more favorable pricing model, such as interchange plus, so don’t fall in this trap if you don’t have to.

10. Accepting cancellation programme sanctions.

Let’s preserve this short and sweet.

Avoid early cancellation fees or lengthy contract terms. The last-place thing you miss is to be stuck compensating higher third party charges when your business outgrows your current processing needs.

11. Not having up-to-date equipment or software.

Your customers expect to be able to pay you the most wonderful, fastest, and safest way probable. In fact, you’re required to have terminals that can process NFC( like Apple Pay) and EMV( smart chippings ).

If you haven’t done so more, it’s time to upgrade your hardware and software so that you can keep your patrons quenched and shorten sham charges.

12. It’s easy to lose your ability to accept credit card fees.

Regardless the size of your business — yes, even if you’re raking in millions of dollars per fourth- if you have one percent of your business disagreed during any afforded month the credit card merchant can block you from countenancing credit cards.

If you rely primarily on credit card pays, then this is something that you can’t afford to ignore.

13. Not participating in the proper steps to avoid chargebacks.

Continuing from the last point, when there’s a dispute that results in a chargeback. Chargebacks are just bad for your business since you’ll be hit with a fee and it elevates a red flag to your remittance provider that something is off. Simply leant, you want to avoid chargebacks at all cost.

Start by knowing what the four reason codes are and then take the following steps πŸ˜› TAGEND

Have a clearly defined return policy. Launch clear terms and conditions. Readily and quickly issue rebates. Afford outstanding customer service. For online merchants, made to ensure that your concoction descriptions are accurate. If you provide services, have a written agreement with your their customers and clients. Don’t use broth photos since this could become patrons feel like they’ve been misinformed. Never close a transaction without valid license.

14. Failing to ask the right questions.

When searching for payment processor, ask as many questions as possible. Again, you don’t want to sign a contact that you can’t get out of because the provider doesn’t fit your needs.

While not an extended register, here are the questions that you should definitely ask the question when looking for a payment processor πŸ˜› TAGEND

What rewards will you be charged? Do you render interchange plus costs? How much will I compensate in annual rewards? When are money fees rectified? How long will it take to set up my history? How will you be able to scale with my business? Do you supporter a wide range of credit cards? Do you also render mobile fee mixtures?

15. Not following the rules to a “T.”

When you find a processor and have been approved to start processing credit card payments, you need to play by their rules. For example, what information will need to process cards that aren’t present? For defence purposes, there’s strict rules in place to place validate the transaction.

Work with your processor to learn their exact regulates in and out so that you won’t face punishments or get blocked from processing credit card payments.

16. Believing you’re not at risk.

Just because you’ve played by the rules and have avoided chargebacks doesn’t mean you’re in the clear. When you acquire credit card pays there’s ever a possible probability lurking around the corner.

For example, if you process support payments for $2,000, which isn’t the norm, your risk profile goes up. Additionally, your risk profile could change if you work with a questionable affiliate or in a high risk industry.

17. Not weighing the pros and cons of minimum remittances.

I’m sure you’ve moved into a store exclusively to see a signaling that says, “ $10 Minimum on Credit Card Purchases.” Even though you just wanted a cup of chocolate, you either can leave or end-up spending more money than you thought.

Business proprietors do have the right to set a obtain minimum of up to $ 10 thanks to the Durbin Amendment of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Business owners can also add surcharges- unless you reside in Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

And, let’s not forget that you’re also accused a cost — generally two percent — whenever you process a credit card.

With all that in memory, if you’re a small business selling mainly less expensive pieces, like a coffee shop, a minimum requirement for credit cards acquires may not be beneficial. However, most purchasers don’t have a problem spending at $ 10 at your business. Let’s not forget, most people prefer use plastic. So, it’s not a bad idea to require a minimum payment.

18. Never discussing your monthly statements.

I get it. It eats-up a lot of time to thoroughly go over your monthly accounts. But, it’s actually occasion well spent.

If you just chuck your statements into a drawer, or never login and idea your statements online, how else are you going to understand your cash flow , rate blames, or uncover concealed overheads?

If you’re confused about an component or call on your statement, don’t hesitate to call your processor for an explanation.

19. Not promoting that you professed credit cards.

Most of your clients may assume you do accept credit cards. But, it wouldn’t hurt to remind them. And, if you recently started countenancing credit cards, then you need to unquestionably let your customers know.

Simply place signals that not only declare that hat you accept credit cards, but also peculiarity the badges of the cards you do accept. I would target signals at both the breast of your collect and at the checkout counter.

If you’re an online business, arrange mottoes of the cards you abide throughout your area. You could even write some blog affixes that explain the various remittances programmes you accept. I would even structured some uprights that march your gathering through the remittance process.

This is a simple space to increase motive buys.

20. Not administering customer service issues in a timely manner.

This is just a part of Business 101. If you want to deliver a great customer experience, which will build them become repeat purchasers, then you need to go above and beyond when it comes to customer service.

For instance, if a customer has a question seeing a transaction and you respond ASAP, you’re not only delivering excellent customer service, you may even foreclose a chargeback before it happens.

21. Refusing to learn how to spot potential fraud.

I’m not trying to be a fear monger here, but nefarious people love to cause trouble for business owners — precisely SMBs. While you may not be able to completely prevent assaults, you are able to lower those curious by knowing how to recognise fraudulent activity.

Do your due diligence by making sure that the billing and shipping residences coincide and being prudent of enormous buys. Also, make sure that you follow defence best rules like encrypting data and not falling for phishing attacks.

And, don’t forget to share this knowledge with your squad as well.

22. Not undergoing stricter underwriting.

If you’re admit credit cards for the first time you’ll probably work with a processor that will accept your work with little due diligence. That’s fine for now, but when you contact revenue around $50,000 or more you’ll want to start working with a processor that is more strict with their underwriting.

In other messages, they’ll assess how risky you are before you can accept credit cards. That reverberates traumatic, but it’s better than not being able to abruptly process credit cards.

23. Choosing not to develop multiple merchant affairs.

This is a smart move since it prevents you from reaching the panic button when your seller provider closeds down your account.

So, instead of working with time one processor, you would process 40 percent with one broker report, 30 percent with another, and 30 percent with yet another. This practice if you get blocked with one processor, you can still accept fees through the other two.

This can get tricky, so work with an expert sooner than last-minute to get this set up correctly.

24. Not continuing scrupulous records.

In general, business owners are expected to keep accurate and detailed records. When it comes to credit card fees, this comes in useful when pushing chargebacks, such as customer forgetting that they drew the purchase.

25. Making it difficult for customers to contact you.

Finally, how are you able furnish excellent customer service and battle chargebacks when your customers can’t contact you?

Make it easy for them to get in touch with you by plastering your contact information, chiefly your telephone number and email address, everywhere you possibly can.

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