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Credit Card Processing

Beginner’s Guide To Credit Card Processing

August 2, 2021 • by shall

There are many considerations to make when searching for a merchant services company. Here are four things to look for before signing a contract. Make sure you ask sales about these points before finalizing your contract.

Cancellation Fees

Do not sign a contract that has cancellation fees. Select a credit card processor who wants you to stay because you are happy with their service, not because of a contractual obligation.  You do not want to commit yourself to a company who may not provide the service you need or who may raise your rates at any time.  Some processors find it more profitable to collect hefty cancellation fees than to provide the service needed to keep their merchants happy. 

Equipment Lease

Most equipment will work with any processor you use and it is easy to reprogram most existing terminals when switching processors. Equipment leases usually come with lengthy agreements.  If a processor offers to provide a free terminal, make sure there is no contract involved. National Processing is happy to provide terminals to their merchants at cost. 

Qualified Rates

When a processor promises a low rate, watch for the disclaimer or small print that explains how rarely that rate will actually apply to a transaction. There are always several criteria that must be met to qualify for any rate, especially the low ones.  First, you must take into account which type of card is being used (debit, rewards, business, etc.) Then you must also account for how the transaction will be initiated (card swiped, key-entered, etc.)  The key to finding the lowest rates is to ask what percentage is added to the Visa and MasterCard Interchange Rate and how much they charge per transaction.  


Compare fees in addition to rates on transactions. Merchant accounts also come with account fees. Most of these are regulatory.  Credit card processors are allowed to mark them up however and some mark them up as much as 500%.  Ask specifically about batch fees, PCI fees, statement fees, & monthly fees and then compare the numbers you get to see who is offering the lowest fees. Sometimes a processor will offer terrific rates, but make up for it by gouging you with exorbitant fees and vice versa.   Make sure you are looking at the total package when you compare companies.

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