10 Questions to Ask Credit Card Processing Companies

When comparing credit card processing companies, there’s a list of questions you need to ask before signing on the dotted line. Not every payment processor is in the best interest of your organisation, and if you aren’t careful, you might end up sacrificing valuable services, paying too much, or even getting scammed.

Make sure to ask the following questions before you take on a merchant services provider.

1. Do You Require a Long-Term Contract?

Many payment processors require some sort of contract for merchant services. While this isn’t always a bad thing (especially if it means securing a better rate), you have to be careful. Some providers will try to lock you into a multi-year contract with little way out.

If a contract is required, make sure to find out the length of the contract period. Also, determine how difficult it is to get out of the contract (and specifically how much it will cost you), just in case you need to walk away before the term is over. If the cancellation fee is reasonable, it might not be a problem.

2. Which Payment Methods Do You Accept?

If you have a diverse international customer base, you want to ensure that your credit card processing company can accept more than just the major Visa, Mastercard, and American Express credit cards.

Look for a provider that can handle debit cards, business credit cards, alternative payment methods, and all of the currencies that your customers use. Once you’re up and running, you can also implement additional payment methods like PayPal, e-wallets, and buy-now-pay-later (BNPL) schemes.

At Unicorn Payment, we’re able to accept credit card transactions in 196 countries, accommodating every major card type and a growing number of alternative payment methods.

3. Do You Have an Integrated Payment Gateway?

A payment gateway (the secure channel through which online credit card payments are transmitted) is separate from a payment processor, but you need both of these services to accept credit card payments from customers.

To save time, money, and frustration, it’s usually a good idea to bundle your gateway and merchant services with a company that offers both services. Otherwise, you’ll have to deal with messy integrations and the constant frustration of managing two services that aren’t designed to complement one another. If your gateway and merchant provider are separate, and you suddenly have a problem with a transaction, which company do you call?

4. What Is Your Fee Structure?

Different payment processors use different pricing models. The three main pricing structures are tiered pricing, flat rate pricing (monthly subscriptions), and markups.

With tiered pricing, your rate is determined by the type of transaction. For example, the best rates (qualified rates) apply to debit cards and non-reward credit card transactions that are made in person (swiped or inserted). Mid-qualified rates apply to loyalty cards, membership rewards cards, and manually entered transactions. The highest rates (non-qualified rates) apply to business credit cards, international cards, high-reward cards, and card-not-present transactions. If you work in ecommerce, a tiered pricing model generally isn’t in your best interest.

With markup pricing, you pay the merchant payment provider interchange fee (which can vary depending on the transaction type) as well as the markup (which amounts to a fixed percentage of each transaction). The markup can range from 0.25% to 2.75%, and it’s typically lower if you pay a monthly account fee or secure a longer-term contract. The only problem with markup pricing is that it can be unpredictable; the interchange may differ from one transaction to the next.

With flat rate pricing, you pay a monthly fee plus a small fee for each transaction. The transaction fee is always the same, so it’s easier to estimate your total monthly transaction costs. It’s similar to markup pricing, but you pay a flat monthly fee instead of the per-transaction interchange fee. Your monthly subscription may also include a suite of services like fraud and chargeback protection, interface integration, customer support, and a merchant dashboard with detailed sales analytics. This can be a great way of simplifying and consolidating your services—as long as you can score a good rate.

5. What Types of Fees Do You Charge?

A credit card processing company will generally charge a transaction fee (based on the markup and/or interchange rate) and sometimes a monthly subscription or account fee. Some companies, though, will impose additional fees like setup fees, PCI compliance fees, statement fees, and other credit card processing fees.

Some companies will even impose monthly minimum fees—if you don’t hit a minimum number of transactions, you pay a fee or penalty as a result. Be especially careful about this one if you’re just starting out or not pulling in high transaction volumes.

So while a company might advertise one price, the actual rates may vary when you account for the hidden fees. Always read the fine print.

6. How Much Time for Funds to Transfer to My Account?

When a credit card transaction is completed, the funds are stored in your merchant account. However, those funds ultimately have to be settled into your business bank account. This doesn’t happen instantaneously.

The industry standard for transferring funds to your bank is 24 to 48 hours. When considering a merchant services provider, make sure that their transfer times are in line with this standard. You don’t want to get stuck with lengthy delays when you need your funds.

7. During What Hours Is Your Customer Support Team Available?

When working with a credit card processing company, you will need customer service—sometimes at odd hours of the night.

If your payment gateway goes down, or you encounter a suspicious transaction, you want immediate help. That’s why it’s important to look for a company that offers flexible—preferably round-the-clock—customer service. Some companies will even offer phone service as well as online chat.

Poor customer service is one of the worst qualities to have in a payment provider, so treat this feature as essential.

8. Does Your Service Integrate With My Online Shopping Cart?

It’s absolutely imperative that your credit card processor is compatible with your shopping cart platform, whether you’re using WooCommerce, BigCommerce, Shopify, Volusion, Zen Cart, or any other software. Most shopping carts will integrate with payment processing services using a simple API.

Your payment processor should be able to walk you through the setup. Many merchant providers, like Unicorn Payment, will even guide you through the process for free.

9. How Do You Mitigate Fraudulent Transactions?

Payment card fraud is a major problem in Europe. The best payment processors have safeguards in place to detect and minimise these fraudulent transactions. Whether the issue is stolen credit card fraud or the credit card chargeback process, your payment provider should be equipped to spot potential problem customers and take action quickly.

In addition, make sure that your payment provider has total PCI compliance and high-level encryption to prevent third-party interception from hackers and other cyber-threats.

10. Do You Offer Wired Credit Card Terminals?

If you have a physical storefront and you aren’t simply operating in the ecommerce space, you might need card readers.

Find out if the payment provider offers point-of-sale systems, card machine technologies (especially those that can accommodate chip cards unless you’re just looking for a basic card reader), and other tools required for in-person sales.

Always Do Your Homework When Shopping for Credit Card Processing Services

There are a lot of important considerations when comparing merchant services. But while you may need to invest a bit of extra time up front to familiarise yourself with the terminology, concepts, and businesses, you’ll save a lot of money and frustration in the long run when you can proceed confidently with the right provider.

One more important thing to remember is this: If a merchant provider offers you a deal that sounds too good to be true, it probably is. So always read the fine print, and never be afraid to ask questions.