E-commerce is no longer a high-risk venture. In fact, it can be easily accessed by new and small businesses. Likewise, getting a merchant account for an online business’ credit card processing needs has ceased to be intimidating.
The occurring problem in e-commerce nowadays is that a lot of business owners tend to choose a merchant provider without proper research and full understanding of the provider’s requirements and services. This is further supported by the fact that there are many merchant account providers which are promising quality service, but actually do not.
So how would you know if you’re choosing the right provider? The selection process for reliable process options is actually quite easy, though long. You only have to identify your business needs, relay them to potential providers, and assess whether they have a package that fit your requirements.
If you’re diligent in screening reliable processor options, then you’ll get your money’s worth. To make things easier for you, take a look at the following list of common mistakes business owners tend to make and try to avoid them.
Not reading the contract
The contract will govern a business’ relationship with the processor. Even though frequently advised against it, a lot of business owners still fail to give importance and read this very important document. However, you must know that once you signed it, you are bound to the provider. You owe it to your business to fully comprehend the terms and conditions, look for red flags, and verify and ask questions to the sales person.
Overlooking hidden fees
It’s common to read feedback from other merchants that they are not receiving the exact price promised in by the sales person. When this happens, there are only two possible causes.
One is that you have not fully understood how the industry pricing works yet. For example, the interchange cost you have to pay varies from one type of card to the other. If you’re holding a corporate card, then you’ll most probably end up paying more.
The second reason would be because the sales person deceived you. In which case, you could report him, but you’ll have to undergo a long process first, and there’s still no assurance you can get your money back. To avoid being in this situation, it’s best you have basic knowledge of the interchange table and read the contract.
Rejecting fraud protection programs
It’s important that you think about risk management before engaging in any transaction. Though it’s true that fraud protection can add to your expenditure, you can at least be safe from fraudsters, cyber thieves, identity thieves, and scammers. What’s a few dollars compared to the assurance that your information and money are secured?
Hiding information from the provider
Merchant account providers will ask you essential information like your contact, banking details, tax information, business type, etc. They need to be fully aware of your business needs so that they can give you the service you need. If you hide even one important detail from them, your application may end up being rejected.
Not meeting volume commitments
If you’re using a US-based credit card processor, check if they require volume commitment. Volume commitment means that there’s a certain amount a merchant must meet every month (not to be confused with monthly minimum) and if not met, penalty or decreased discount rate could be issued. It’s best that you’re aware of any rules that apply to your agreement with the merchant account provider.