How to Pick the Right Merchant Services Provider for Your Small Business

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Whether you run a brick-and-mortar retail store or an eCommerce store online, you need to be able to accept credit cards easily. After all, most people pay with them, and you want to make it as painless as possible for people to buy from you. To that end, partnering with a merchant services account provider can provide a simple way for you to process credit card payments.

How the Industry Has Changed

Just a few years ago, your only option to accept credit cards was to invest in one of those bulky credit card swiper machines. Sure, these are still used by lots of businesses, but some changes have opened up your options today.

If you run transactions online, there are online card processing services like Paypal, WePay and QuickBooks Payments. No machines needed (other than your computer). If you accept payments on the go, like at a farmer’s market or book signing, there are mobile payment processors like Square to consider. Many integrate with your existing accounting software, making it simple to reconcile your purchases.

What to Expect in Fees

Naturally, when you pick a merchant services provider, any merchant will charge you to use its services. Some services offer a free plan with a slightly higher per-transaction charge, versus a plan with a monthly fee and a lower per-transaction fee.

You’ll typically pay between 1.75 percent and 2.9 percent of the transaction price per sale, plus a nominal flat fee per transaction, like $.50. Your service provider may charge more for transactions that require you to key in the credit card number versus swipe it (these are at higher risk for fraud, so they want to cover their bases).

How to Find the Right Provider

In looking to pick a merchant services provider, start with the accounting software you use, as they may have a credit card processing service, or may partner with companies that offer them.

Ask about fees. It’s definitely worth it to shop around for the best price and service. For example, if you know you’re going to have a high volume of sales, look for a company that will discount the percent they charge you if you hit a certain dollar amount in monthly revenue. Those savings add up fast!

Consider how often you’ll actually use the service. If you plan for sporadic use, it’s probably not worth signing up for a monthly fee package just to cut back on the percent per transaction. You want that monthly fee and savings in per transaction costs to be worth it for the number of transactions you’re processing. Essentially: how much are you willing to spend to be able to accept credit cards?

Ask how quickly funds will hit your account after a transaction. The sooner the better, but some companies take up to a week. Can you afford to wait that long to get paid?

Before you sign up, check with the Better Business Bureau to ensure that the company doesn’t have any complaints against it.

Look for a free trial and give a few different merchant service providers a spin. See which is most intuitive and easy to use, and stick with it.

Credit Card Photo via Shutterstock

Melinda Emerson Melinda Emerson, known to many as "SmallBizLady," is a Veteran Entrepreneur, Small Business Coach and Social Media Strategist who hosts #Smallbizchat for emerging entrepreneurs on Twitter. She is also the author of, Become Your Own Boss in 12 Months.

3 Reactions
  1. It may be best to keep your options open. It allows your buyer to buy with different options so that it is more convenient for them.

  2. I agree with Aira, that it may be better to keep the options open.

  3. I recently retired from pharma, and I still want to sell….something outside of medicine. I have checked into some job boards, and I am amazed at the amount of listings for companies who compete in the merchant services field. I the small amount of research I have conducted, I’m getting the idea that (as in most industries), there’s a seamy side to the business, ie some service providers may be looked down upon, generally, in the industry, because of certain practices. As far as checking out ratings, I’m never sure if the rating service is actually run by one of the companies. I am not sure I trust the ratings of the BBB either. Probably, some of these ratings sites are above board, but of course, which one. There seems to a con around every corner. The idea of selling and providing this type of service to a small business could be very rewarding, I’m completely at a loss as to which company I should pursue as a potential sales agent for them. Do you have any insight for me. Thanks in advance if you do. Rob