How to choose a payment processor for your business

We have all seen the ads come through our social media feed saying “start accepting credit cards in 5 minutes.” You’ve also heard “if it sounds too good to be true“… Although those ads are technically true, there is actually a lot that they aren’t telling you!

As a business owner, you should always feel in control. After all, it’s your money! If you ever feel at someone’s mercy then it’s time for a second opinion. There is a reason why we get those gut feelings so listen to them!

Let’s take a closer look at the 3 C’s to consider when choosing a payment processor that’s right for you and your business.


Cost is possibly the number one thing to consider when choosing a payment processor and yet so many business owners seem to overlook it. By taking a little extra time to do your homework you can save thousands in the long run. Read that again… thousands of dollars!

Did you know that as a business owner, you can choose what you want to pay? We never get tired of saying this – business owners should always feel in control of their money.

If your current or potential payment processor hasn’t told you that you have options, then you need to run. You should be presented with a list of pricing options that you’re allowed to choose from based on your business needs. These pricing models include the following:

Interchange Plus Pricing
Interchange is a rate that is set by major credit card companies such as Visa, Mastercard, AMEX, and Discover. This is how those companies get paid and those rates are not negotiable no matter how good the payment processor is. Since your payment processor needs to get paid for their service as well, they will do a slight markup on top of the Interchange rate. They might quote you something like “Interchange + 0.30% + $0.09 per transaction.” This option is the best if you choose to cover the fees yourself.

Flat Rate Pricing
This is where the processor charges a fixed percentage per transaction. Flat Rate Pricing is the most commonly used in credit card processing, but that doesn’t mean it’s the best. To ensure that your fees are covered, the payment processor will put you at a higher rate. Your quote might look something like “2.9% + $0.10 per transaction”.

Cash Discount Pricing
This is how you can eliminate 100% of your credit card processing fees and many business owners are switching to it. In the simplest terms, you’re passing the fees to your customer. It’s recommended to do a 4% cash discount to make sure all fees are covered, especially credit cards with higher rates such as AMEX. If you’re working with a good payment processor, they can also set up your system to allow you to bypass the cash discount. For example, if your favorite customer comes in and you don’t want to charge them the additional 4% you can hit a button on the terminal that will have you pay the fee instead.

Customer Service

So many companies have been letting the customer service side of the business fall by the wayside lately. Never underestimate the power of excellent customer service. In fact, we have met business owners who are willing to pay more to a company with good customer service and the same goes for customers.

Business owners have countless plates spinning in the air at any given time and rarely have time to sit on hold waiting for a customer service rep to answer. In the world of business, if there is a problem with their terminal then it needs to be fixed immediately.

Before signing up to work with a particular payment processor, test their customer service. Call their customer support number and ask a simple question such as “how long does it usually take to ship a new terminal?” The focus of the experiment was to answer the following:

  • How long did I sit on hold?
  • Was the agent friendly?
  • Did they seem knowledgeable and answered my questions to my satisfaction?

We recommend contacting them via email and chat, too. Not every company with have chat support, but if they do then take advantage. This will help you see what their response times are like and how their replies are structured. Many companies have started replying to emails with links to articles and saying “we think this might help”. In our opinion, this is not good customer support and can waste a lot of your valuable time if it’s not helpful.

Whenever you can, try working with a local payment processor and/or merchant services company. This will help you save the most time because you can call your local rep and they can generally get a faster resolution. You can continue focusing on your business while the rep is handling any problems.

No matter how much technology is developed, nothing will ever replace the power of human relationships.


If a payment processor wants you to sign any contract stating you’ll be with them for X amount of years, then walk away immediately. It’s that simple.

Ask yourself why the payment processor would feel the need to lock you into a contract? Processors who have contracts will do a 3-year contract and tell you that it’s “industry standard”, but we’re here to tell you, NO IT’S NOT!

At the end of the day, the decision is yours. A business owner will never make a poor choice for their business, not intentionally anyway.

Wishing success to all small business owners and we’re happy to answer any questions that will help you navigate the crazy world of payment processing!

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