Whether you are looking to start your first merchant account or you have been accepting credit cards for years, this post is intended to give you some simple and effective credit card processing guidelines. Following these simple rules will ensure you don’t experience any unnecessary headaches with your merchant account.
- Don’t rush into an account. The credit card processing industry has many moving parts and there are quite a few things to consider when opening an account. Give yourself enough time to do the research necessary to make a good decision. Selecting the right service provider can make the difference between a great experience and a miserable one. Make sure you understand how you intend on accepting credit cards now and in the future. There are many different account types depending on how you interact with your customers. Choosing the right account type ensures the very best rates are available to your business. Make sure you understand how interchange works. The majority of the fees paid to process credit cards come from the credit card interchange networks. Understanding how the interchange fees are calculated will help you negotiate the best deal on the account. Make sure you ask questions on items you don’t understand and develop a working relationship with a service provider before you sign up. Make sure you select a provider that has a dedicated account representative for you to work directly with.
- Abide by the rules. The merchant service agreement outlines the rules and regulations for the use of the account. Make sure you understand the length and term of the contract. Make sure you understand what you have been approved to sell. During the application process you indicate the products and/or services you intend to sell. The rules for a merchant account stipulate that you are only allowed to accept credit card payments for the products/services approved on the application. Selling something else with the account can lead to the account being terminated and the business placed on the MATCH list.
- Angry customers can hurt your business. Make sure that you respond to customer billing complaints immediately. Customers that can’t get their billing complaints resolved with the business will contact their credit card issuing bank or the credit card association and initiate a chargeback. Excessive chargebacks can also lead to the account being closed by the processor not to mention hefty fines for each occurrence. The best defense is a a good offence. Makes sure your customer service number is displayed on your customer’s credit card statement along with your business name. That way they will call you first. Make sure you answer their call and help resolve their issue.
- Stay within your limits. Your merchant account will have certain limits established for the high ticket amount and total monthly volume that can be processed with the account. These limits are known in the industry as soft limits. There is always a little leniency for exceeding the limits on the account but it is always a good idea to know your limits and be proactive if you intend on exceeding them. For example if you know you are going to exceed your high ticket amount with a certain sale, call in for authorization first. This demonstrates good management and will make it much easier to increase your limit amounts in the future.