If you are a person who has an online store, you likely will need to use a credit card processor in order to make sure that you are able to accept payment for your goods. However, getting the right credit card processor can be difficult due to the large number of choices that are out there and the often confusing terms of agreement when it comes to signing a contract. You don't want to spend too much money paying for your credit card transactions. Here are some common credit card mistakes that online store owners make and how to avoid them.
1. You Sign Up For a Ludicrously Low Rate That You Never Actually Get
One common mistake that online store owners make is signing up for a ludicrously low rate only to never receive it because it only applies to certain types of purchases. There is one main reason why you might fall for this trap: you didn't ask enough questions. For example, suppose that a salesperson for a credit card processing system is offering you an amazingly low rate for all swiped purchases. You are never going to have any swiped purchases because you run an online store. You might not realize this because the offer seems too good to be true and you're excited.
One way to make sure that you are getting all of the information that you need is to ask about every type of transaction. Ask about foreign cards. Ask about premium cards. Ask about any differences between credit and debit cards. Write down all of the charges for each situation for each card processor that you are considering. This will allow you to be able to avoid signing into a low rate that you never actually receive and accurately compare all of the processors.
2. You Have to Pay Huge Cancellation Fees
If you are running a startup, you might worry about what happens if you fail. If your business goes under, you might be facing huge cancellation fees from your processor due to the fact that your processor had to invest a significant amount of time and effort to set up the contract in the first place. Before signing on with a processor, be sure that you talk to them about your potential situation. See if you can pay a higher upfront, nonreturnable fee when your business first starts out and so you can get a reduced cancellation fee in case your business closes.
3. You Have Volume Commitments
In order to get a lower fee, you might have committed to processing a certain amount of money with your processor. If you don't meet that amount of money, you might have to pay fees or lose your low rate. If you are a small company or a medium company, don't sign up for a processor that has volume commitment plans because the risk that you don't meet them is too great.
For more information, talk to a company that specializes in ecommerce merchant solutions for credit card processing, like Midwest Payment Processing.Share