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Ask Your Merchant Provider the Right Questions

Whenever you’re approaching a new business alliance, it’s often challenging to keep a good headspace about whom you’re working with. Asking the right questions before signing new documents is crucial, and our team at Evolve Payment often hears, “I wish I knew to ask that question before I signed that agreement when I started the business xx years ago.” As a business owner, we understand that you have many other spinning plates in the air. You know how to run your company but need business alliances to help keep the train on the tracks. The best way to do this is by asking questions:

“Asking the right questions takes as much skill as giving the right answers.” – Robert Half.

Don’t worry; we’re here to help. We’ve compiled a list of questions that we’ve frequently encountered during our twenty years in the industry. We encourage you to take this list and pose these questions to your current provider to better understand your relationship and how you’re accepting payments.

What is PCI compliance, and do I need to fill out the PCI form?

The Payment Card Industry Data Security Standard (PCI DSS) is an information security standard for organizations that handle branded credit cards from the major card schemes. The PCI Standard is mandated by the card brands but administered by the Payment Card Industry Security Standards Council. The PCI DSS requires business owners to comply with their security standards and complete their security form. If you do not complete this form or do not follow their guidelines, you will be fined monthly and will be held responsible for any fraudulent transactions that come through your account. Typical monthly fees are $30-$45 a month.

What is the difference between net effective rates and processing rates?

  • Net effective rates are the combination of different card types and the mean effective rate. Taking the average of all cards is the best way to understand your “true” processing rate, especially since there are many different processing rates from a multitude of different card brands.

How do I pull merchant processing statements for analysis?

  • This varies on your current processor, but you should receive an email or postage with your monthly statements. We advise our clients to review their merchant processing 30 and 90 days after an agreement to confirm that the proposed rates are being produced. We also recommend that our clients analyze their merchant statements when preparing tax documents to find potential additional savings. It’s worth noting that credit card processing fees are tax-deductible.

What fees are you charging?

  • Statement Fees — A monthly fee some merchant processors charge to generate your statement.
  • PCI Fees — Fees imposed by the Payment Card Industry Data Security Standards (PCI DSS) Counsel onto merchant processors and sales organizations. Some PCI compliance fees go towards funding security measures and anti-fraud activities.
  • Batch Fees — Batch fees are similar to transfer fees. Before money gets deposited into a business’s bank account, the transactions for the day are “batched” together into a single deposit. Fees are charged to every batch deposited and vary across merchant processors.
  • Refund Fees — A charge applied to a business when it refunds money.
  • Gateway Fees — These are fees for using a payment gateway that passes a credit card’s data around the internet to either allow or deny the charge to that card.
  • Address Verification Fees — Providers charge these fees to ensure the address on a credit card is correct anytime you run a transaction with that card.
  • Monthly Minimum Fees — Merchant accounts charge these if the transaction processing fees don’t equal a certain amount. The cost of monthly minimum fees varies across merchant accounts.
  • ETF Early Termination Fees — ETF fees are levied when you leave a merchant processor before your contract ends.

How long does it take to get back up and running after migrating to a new processor?

  • Thankfully, with updates to the software world, migrating to a new processor is easier than ever. It should take no more than an afternoon to make the switch and conduct training. At the end of the day, running your business comes first, and having a significant amount of downtime could directly impact your productivity. If you’re processing your transactions through a virtual terminal, this process should be painless and direct without skipping a beat. Make sure to ask your processor how they handle training on the new platform.

What does the chargeback process look like?

  • Chargebacks and voided transactions are a challenge for businesses since they must process the transaction twice. We always encourage our clients first to check when the transaction was processed, and if it’s on the same day, to void the transaction instead of conducting a chargeback. You’ll be charged for the first transaction and again to send the money back to the customer. It may be worth asking your customer if they can accept a check instead of a card chargeback to avoid paying for fees twice.

When do you pull fees from my bank account?

  • Most processors will pull from your bank account monthly, but some will pull daily after completing the batch. It’s prudent to get an idea of when your processor will pull from your bank account so you can expect and examine transactions, giving you the ability to ask questions when you see irregular withdrawals.

How do you handle expired credit cards?

  • It can be challenging when a customer’s expired card prevents a card transaction from processing. If you find this to be a common issue with your customers, it may be worth looking into software that predicts when cards will expire so that you can reach out to your customer to update the card on file. Software like this can save you days of back-and-forth conversations and is even more relevant if you have a subscription-based business.

What should I do if I have a high ticket that needs to be processed?

  • We advise that if you have a high ticket coming in that’s not a typical transaction, give your provider a quick call to inform them that you are processing a “real” transaction. This way, your provider will know it’s authentic and won’t block it. The reason why high, and in general, irregular transactions are blocked is because it gives providers the ability to reduce fraudulent activity and prevent blacklisting merchant accounts. Calling your provider is a simple yet important step to make sure your business is protected.

Choosing the right merchant processor is never easy, and our team at Evolve Payment hope that these questions will help you on your path to finding the right one for your business. If you’re currently seeking a new relationship with a provider, we have over 20 years of experience reducing processing costs in the business sector, and would love to work with you. We’ll help you improve your bottom line and get the most out of your card transactions – contact our team to get started!