Although the decision to accept credit cards and debit cards might be an easy one for small businesses, choosing the right processor isn't as simple.
Small businesses currently have more than 1,500 credit card processing service options, which makes finding the best deal a difficult task.
Phil Hinke, a credit card processing expert and owner of MerchantFeeSavers, said business owners first must understand the credit card processing industry, which he said is, in some ways, comparable to the auto industry.
"Ford and GM produce and market their product, but if you want to buy a car, you have to go to a dealership," Hinke told BusinessNewsDaily. "The same is true with Visa and MasterCard. They market their products, but if you want credit card processing as a merchant, you need to go to a merchant account provider."
In addition, just like with car dealerships, some credit card processing providers offer cheaper options and are more straightforward, while others are more expensive and hide things in the fine print.
"There are some providers I would never let my merchants process with, and there are some providers I feel more comfortable with — but you still have to watch them," Hinke said. "They will still overcharge, so you have to keep the reins tight."
Because there are so many providers and options for credit card processing services, Hinke said, there are three steps small businesses need to take to ensure they're getting the best deal:
- Prepare: Business owners should get familiar with the credit card and credit card processing industries. They should research the fees and rates, as well as the differences in cards. This will offer more clarity in terms of the services they will need. This is also the time when business owners should start collecting quotes to begin comparing the services.
- Negotiate: Credit card processing fees aren't set in stone, so business owners must negotiate if they want the cheapest deal. They have to sit down with a credit card processing service they like and try to work out a deal that will make the most financial sense. Bringing in quotes from other providers is a good way for small business owners to help strengthen their negotiating position.
- Follow up: Once a small business owner has signed up with a credit card processing service, it is imperative they take regular audits of their bills to ensure their fees aren't being raised without their knowledge. Merchants have to constantly make sure they are getting the deal they negotiated.
In the end, Hinke said, it is important to remember that credit card processing providers are also worried about getting the best deal for themselves.
"You aren't going to find anyone that is really going be bending over backwards to make sure that you, the merchant, have the best value," Hinke said. "You have to be prepared, you have to have the right attitude and you have to negotiate that rate to get the fair price you deserve."
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This story originally published on BusinessNewsDaily.