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Signing With a Credit Card Processor

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confused business man reading a credit card processor agreement

Signing With a Credit Card Processor

Choosing a credit card processor for your small business can be overwhelming, and even damaging to your profit margins if not done right. Here’s how you can avoid these 3 common missteps.


Choosing a credit card processor can be overwhelming, to say the least.  When it comes to choosing which movie to see, which tie to wear, or the color of your Tupperware, the decision likely doesn’t make a practical difference. Choosing something as important as your credit card processor (CPC), however, is so important that it can actually make or break your business- you know, the one that affords you those movie tickets or that tie?

When choosing a CPC, there are a number of considerations to be examined and the process can be complex and confusing. When presented with so much to consider, many small business owners just look at the main processing rates being touted and skim over the rest.

This kind of attitude could be a very costly mistake, as there are a number of other important considerations to take into account; considerations so vital that they can significantly affect your bottom line.

Watch out for these three common missteps when choosing a credit card processor for your small business:

Make sure you fully comprehend the rates and fees outlined by your credit card processor.

This may feel familiar: “What?? Only 1.79%?? I’ll take it! Hang on…. Why am I paying so much more than I expected? This isn’t the rate I was told I’d pay!”

There are a number of reasons why a scenario like this can happen. One is that many merchant account agreements include a large volume commitment; if you don’t process a set quota of sales through that processor, your amazing low rate gets bumped for a much higher fee on every transaction.

Another is an unethical merchant account salesperson.  There are dozens of terms and conditions in a merchant service agreement, many of them extremely confusing, that you can easily be misled into signing an agreement that, at the end of the day, costs you a fortune.

Another, more legitimate reason is that it actually does cost the credit card processor different amounts to process different types of credit cards. Visa and Mastercard charge, for example, an interchange rate, which will be different depending on if the card is a debit card, a credit card, has air miles or cash back incentives, or other bells and whistles. Your processor can’t control these costs, and will typically pass them along to you.

One great way to avoid getting hit with all these kinds of unexpected charges is to go with a “fee free” or “Cash Discount Program” type of credit card processor, like that offered by Merchant Driven Inc. In this type of processing, the processor assesses these fees to the customer. The customer always has a choice to pay with cash or in-store gift card, rather than use his or her credit card; but for the convenience of using the card, they will be charged a standard (on every sale) service fee.

Be sure to read the terms and conditions of your merchant service agreement; then, read it again.

It isn’t just the pricing rules that can get you in trouble; many business owners also end up getting hit by big penalties for trying to break up with a payment processor that isn’t working for them.  

Contracts can be up to five years and have huge cancellation fees if you try to get out early. Read the fine print and understand what you’re committing to.

Other hidden rules and regulations, fees, and charges can be buried deeply in your contract, so go over it with a fine tooth comb. Chargebacks, declined transactions, transaction limits, and minimums can also cost you pennies or dollars here and there.

Skimming and signing can cost you big. If you’re like me, and you get instant ADD when reading such a contract, ask someone you trust to read it over with you.

Concern yourself with security

It sucks, but the reality is that credit card and data thieves, hackers, and cheats are out there and they are a big concern. Cyber attacks and data breaches are more common than ever and they can seriously affect you.  

Make sure your credit card processor is PCI Compliant and that all your transactions are fully encrypted.

While technically security is the responsibility of your merchant service provider, ultimately you and your company are going to get the blame when your customers have their data breached. Hire a credit card processor that makes security a priority.


Do your homework when it comes to credit card processing for your small business and you’ll be just fine! Navigating the maze of merchant accounts and payment processing can be overwhelming and confusing; visit our blog often to learn more about processing and the ins and outs of running a small business!

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Lynette Garet

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