As a business owner, you know that one big mistake can hurt your business for months to come — and even years. That’s the reason we’re providing this guide to picking the best credit card processor. It can help you avoid a mistake that has been pretty painful for too many businesses.
Sure, we want you to consider using National Processing award-winning processing services. However, this guide is mainly meant to give you the insights you need to make a wise choice that prevents headaches and hassles for you.
Here are the topics we will cover:
- Introduction
- Types of Credit Card Processors
- Factors to Consider When Choosing a Processor
- Evaluating Your Business Needs
- Comparing Top Credit Card Processors
- Steps to Choose the Right Processor
- Common Pitfalls to Avoid
- Future Trends in Credit Card Processing
- Conclusion
- Bonus Section
- FAQ
As a bonus, at the end, we will list three other mistakes that can be as financially hazardous as choosing a poor credit card processing provider.
Types of Credit Card Processors
A good starting point is to highlight the main categories of credit card processors (see below):
- Traditional Merchant Account Providers
- Payment Service Providers
- Payment Facilitators
- High-risk Processors
Lots of factors determine which category is best suited for a business. The size of the company is one factor along with what type of industry the business is in.
Maybe the best way to show off the differences in the four categories of credit card processors is to put them side by side. See the following table…
Category | Traditional Merchant Account Providers | Payment Service Providers | Payment Facilitators | High-risk Processors |
Features | Support for various payment types, POS systems, payment gateways | Multiple payment methods, quick setup, integration with existing systems | Fast onboarding, multiple payment types, fraud prevention, reporting | Advanced fraud protection, multiple payment types, tailored risk management |
Fees | 1.75%-3% per transaction, possible monthly fees | 1.5%-3.5% per transaction, possible flat monthly fees | Transaction fees, potential hidden charges, flat-rate monthly fees | Higher fees, including setup fees, monthly fees ($10-$100), chargeback fees |
Advantages | Lower transaction fees, extensive support for payment methods | Lower upfront costs, ease of use, rapid onboarding | Simplified processing, quick acceptance of payments, additional services | Robust fraud prevention, acceptance of multiple payment types, tailored services |
Disadvantages | Longer setup, potential higher overall costs, complex applications | Processing volume limitations, dependency on provider for support | Higher fees than traditional processors, potential service issues | Higher fees, rigorous vetting, higher chargeback likelihood |
Typical Users | Small to medium-sized businesses | Small businesses and online retailers | Small to medium-sized businesses and start-ups | High-risk industries (adult entertainment, travel, eCommerce, subscription services) |
Security Features | PCI DSS compliance | PCI standards, fraud detection, secure gateways | PCI DSS compliance, encryption, fraud prevention | Advanced security, encryption, PCI DSS compliance, robust fraud detection |
Another great way to compare factors for what category of processor you need is to use a fee calculator.
Factors to Consider When Choosing a Processor
Of course, after you choose the right merchant services category, you have other things to consider.
You must be sure that secure transaction standards are met by the provider, and pricing is crucial too.
Pricing options are often fall into one of the following types of plans:
- Interchange-plus pricing
- Flat-rate pricing
- Tiered pricing
National Processing uses interchange-plus pricing. Our customers love this option because it saves them the most money and is the easiest to understand how the fees work.
All businesses are different, so be sure to consider unique nuances that will affect which type of pricing is to your advantage. A fee calculator is your best ally for deciding.
What other things should you think about so you can partner with the best credit card processor?
Equipment costs are important, as is the ability of the payment equipment to integrate with other business tools.
You also want a processor that understands PCI compliance and has security standards that go well above the baseline. And if the company offers you top-notch customer service (U.S.-based is ideal), they will explain how these sometimes complex compliance matters work.
Evaluating Your Business Needs
It can be tough to know the exact business needs when you’re starting a brand new business. An experienced business owner simply has more data to work with for deciding which credit card processor is right for them.
Often, that experience includes some negative experiences with a processor that was not all it was cracked up to be! With so many processing companies out there, unfortunately, the quality of service has dropped on average.
We suggest, at the minimum, choosing a merchant services company with ten years of experience or more.
Whether you’re a new owner or veteran entrepreneur, below you will see the details needed to fully evaluate your payment processing needs:
- Sales volume
- Average transaction amount
- Offline vs. online sales
- Mobile payment needs
- Domestic vs. international transactions
Those details are often influenced by something we mentioned earlier — your business type and the industry your company fits into.
Comparing the Best Credit Card Processors
It would take a while for us to list even the top ten credit card processors and what sets them above the rest.
So, instead of that, let us just highlight two things that sets our company apart. After you consider those key factors, then you can look closer to compare us to other top merchant services providers by using this comprehensive comparison.
National Processing rises above the competition by offering the best customer support in the payment industry. It is U.S.-based and available 24/7. Just see our reviews and you’ll see how helpful, human, and personal our service is.
The second thing setting us above average providers is our $500 Guarantee. We know our rates are the lowest in the industry. So, we’re unafraid to offer this Guarantee that other providers would never offer you!
One point to bring up with comparisons before we move on to vital steps to actually choosing a payment processor.
After you sign a contract, you won’t get to compare again if you’re unhappy, until the contract ends.
So, it’s vital to take your time deciding and don’t be rushed into a decision by a salesperson who may only have their commission in mind.
Steps to Choose the Right Payment Processing Solutions
We will cut to the chase for the steps needed to sign up with a good provider.
- Evaluate your business model and sales data
- Determine supported payment options
- Compare fee structures and pricing models
- Verify security compliance and fraud protection details
- Check compatibility with your current systems
- Assess customer support reviews
- Consider scalability and flexibility for growth
- Test the user experience
- Review settlement timeframes
- Research client reviews and processor reputation
- Call other businesses to get their recommendations and advice
- Analyze reporting and analytics features
- Examine international payment capabilities (if applicable)
- Investigate chargeback and dispute resolution processes
Try to be forward-thinking too. Why? The credit card processing world is quickly evolving.
For instance, digital wallet usage is up, with 45% of consumers using a digital wallet for payments in 2023.
Just that one finding shows that shoppers are changing behaviors. Many will shop elsewhere if their preferred payment method is not accepted.
Common Processing Pitfalls to Avoid
As we look at pitfalls that come with choosing a less-than-stellar processing company, we have to start with the worst problem.
Hidden fees. No business owner should have to worry about their processing sneaking in fees on them. After all, owners have too much to do and worry about already. Running a business is hard and they deserve help from their payment company, not hassles and sketchy treatment.
Also, owners have to be wary of long-term contracts. These can lock you into a deal with a provider who hits you with hidden fees but…
Even if their fees are transparent, what if they fail to give you great service? What if their equipment is never updated? What if they stop offering a specific digital wallet payment option?
If you’re locked into a contract, you will be stuck with those realities that hurt your revenue.
A related pitfall is an early termination fee if you want to get relief from poor service or glitchy payment equipment.
National Processing gives our customers a way to avoid a credit card processing contract altogether!
Sign up with National Processing today. Test our $500 Guarantee and leave your payment hassles in the rearview mirror!
Future Trends in Credit Card Processing
Today’s trends and ones beyond the horizon will affect your secure transactions for years to come, perhaps decades.
Don’t you want a credit card processing partner with the experience to help you navigate the future?
So many changes are poised to disrupt numerous industries. Yours could feel the impacts or ripple effects.
Sure, artificial intelligence is one trend that’s turning industries upside down. AI can help you with business efficiency but has also introduced new threats to data breaches, scams, and hindering secure transactions.
Other payment trends with no signs of slowing include:
- Contactless payments
- Mobile wallets
- Cryptocurrency acceptance
- Machine learning in fraud prevention
- ACH payments (major fee savings)
Conclusion
Our hope is that you now have deeper insights so you can choose the best credit card processor. Not for some hypothetical business, but your business – your pride and joy!
We broke down the types of processors available to you. Then we noted all the factors that you need to consider when comparing processing companies.
The key is patience, so you don’t make a decision that hurts your business from day one and turns into a long-term nightmare.
Lastly, we gave you steps to use when choosing a payment provider for either a new business or existing company.
Thanks for reading. Your bonus section is below (plus, two common questions are answered about credit card processing).
Get started with National Processing’s award-winning merchant services.
3 Mistakes That Haunt Businesses In The Long Run
Poor Financial Planning: It takes money to make money — and to keep making money. It’s great to be an expert in whatever your business sells. However, if you’re not just as knowledgeable about start-up costs, budgeting, and managing cash flow, odds are stacked against long-term success.
Ineffective Marketing Strategy: Most small business owners aren’t trained marketers. So, they must use intentional strategies to market their businesses. If not, even a successful business can take a nosedive due to industry disruption or heavy competition.
Expanding Too Quickly: Growing your business is exciting and rewarding. Yet, without a system in place, even an expansion to a new location or 10xing your product offerings may not produce the results you imagined. Owners have to protect themselves and their employees from burnout and be wary of revenue sources that don’t produce large enough profits.
FAQ About Credit Card Processors
How can I prevent payment processing equipment failures?
Make time to update software and firmware. Use battery backups for power outages. Maintain and clean hardware. Use equipment recommended by a trusted payment provider. Create a simple employee training system.
How can I lift my e-commerce store profits?
Create a written strategy to reduce returns and cart abandonment. Why does this matter? 27% of owners said the e-commerce portion of their business is hurting overall profitability. Nearly 70% of shoppers abandon their carts before checking out. To reduce returns, clarify your return policy and check-out instructions. Reducing cart abandonment can be done in 24 hours by automating abandoned cart emails to bring the shopper back to complete the purchase.
