9 questions to ask when considering a merchant processor

Credit card merchant processors are a critical component to any business. But with so many merchant processors to choose from, deciding which one is best for your gym can be tough.

That’s why our team at Wodify created a list of nine questions you should ask the merchant processor you’re considering for your business.

1. How will I receive credit card and ACH statements?

Some merchant processors provide several hardcopy paper statements every month, which can make bank reconciliation tough. To make that process easier, other merchant processors are moving towards digitized, paperless systems that let you view your transaction history online.

2. What kind of fees should I expect?

Most merchant processors will advertise their rates, but not the fees involved. These can make a huge difference in the cost of running transactions for your business. When you’re shopping around for a merchant processor, ask about the following nine fees:

  • Statement Fees — A monthly fee some merchant processors charge to generate your statement.

  • PCI Fees — Fees imposed by the Payment Card Industry Data Security Standards Counsel onto merchant processors and sales organizations. Some PCI compliance fees go towards funding security measures and anti-fraud activities.

  • Transfer Fees — Fees charged for transferring money to your bank account.

  • Batch Fees — Batch fees are similar to transfer fees. Before money gets deposited into a business’s bank account, the transactions for the day are “batched” together into a single deposit. Fees are charged to every batch deposited and vary across merchant processors.

  • Refund Fees — A charge applied to a business when it refunds money.

  • Gateway Fees — Fees for using a payment gateway that passes a credit card’s data around the internet to either allow or deny the charge to that card.
     
  • Address Verification Fees — These fees are charged to ensure the address on a credit card is correct anytime you run a transaction with that card.

  • Monthly Minimum Fees — Merchant accounts charge these if the transaction processing fees you run don’t equal a certain amount. The cost of monthly minimum fees varies across merchant accounts.

  • Cancellation Fees — Cancellation fees are levied when you leave a merchant processor before the end of your contract.  
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3. What’s the chargeback process like?

It’s never a fun when a customer disputes a charge for your business, but it’s important to know what the process is. The credit card company is going to have your customer’s back. It’s important to know that the merchant processor has your back with a process that takes the stress out of chargebacks.

4. How long do payouts take?

Payouts are highly dependent on your merchant processor and your bank. Knowing when payouts are going to hit your bank account will help you plan ahead.

5. When do you deduct fees and how will they show in my bank account?

Understand the money coming in and out of your account. Knowing how and when your merchant processor deducts fees helps with financial planning for your business.  

6. How do you handle expired credit cards?

It stinks when a transaction fails because someone’s credit card expired. Luckily, some payment processors come with tools that update expired credit cards automatically.

7. How much money can I charge through my account?

Just like the way some credit cards have limits, some merchant processors have a cap on how much you can run through your account. It’s important to understand whether they have limits for:

  • Single Transactions
  • Total Monthly Transactions
8. What kind of reporting do you offer?

It’s important to be able to link money going in and out of your account to invoices and statements. Some merchant processors provide reporting tools that track this information for you.

9. How do rates vary for different cards?

Fees may vary depending on the type of credit card you run — especially rewards cards. Credit card companies often charge additional fees to merchant processors and it’s important to understand how this may affect your rates.

  • Debit Cards
  • Visa/Mastercard/Discover
  • American Express
  • Rewards Cards
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Choosing the right merchant processor for your business is no easy feat. But by asking the nine questions listed above, you should be able to find one that meets your needs.

If you’re interested in learning more about Wodify Payments, book a fifteen-minute call with one of our team members.

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