Fintech Insights

5 things to look for in a merchant service provider

November 14, 2022

Today's consumers expect a lot of options from businesses. More options mean more competition, and accepting a customer’s preferred payment type can make or break a sale. That’s why a merchant service provider will play such an important role in the running of your business. Selecting the right provider to help your business meet customer expectations for payments is crucial.

How to choose a merchant services provider

How do you pick from all the available options? Here are five things to look for when choosing a merchant services provider.

1. What support is available?

Being able to access help when you need it should be one of your top priorities when evaluating merchant services providers. Fast, simple payments are one of the primary factors driving customer satisfaction, so having a provider that has your back with strong support services makes all the difference.

When vetting a merchant services provider, get a clear understanding of who will support you with payment related issues, when that support is available and how much that support will cost. Find out if there’s a fee for support services and if so, whether it’s all-inclusive, a-la-carte or tiered for different service levels.

A strong merchant services provider will offer several options for support with availability 24/7 via phone, email and live chat. It will also provide resources like fact sheets and training that cover a range of payment topics from hardware and software to funding and bulk processing.

The merchant services provider’s support services should also be able to offer guidance regarding payment processing equipment. This includes providing referrals and access to processing hardware and software like POS systems, standalone terminals, virtual terminals, card readers, transaction reporting tools and more.

Payments continue to evolve – and so do businesses. To keep a competitive edge, it’s important to periodically review your payments processes and equipment, making upgrades when necessary. With support and advice from a reputable and experienced merchant services provider you can feel confident investing in the payments products and services you need to grow.

2. How reliable are their systems?

Processing uptime is critical to smooth business operations. The more card payments you process, the more revenue you stand to lose if the card authorization network goes down. It’s important to find a merchant services provider with a long track record in reliability and with proven systems for addressing outages when they happen.

Although a processor can’t prevent all outages, such as those occurring within the card brand network, they can help mitigate the impact an outage has on merchants. Find out how potential providers handle unexpected authorization network outages and how your business operations will be impacted.

3. What types of security programs do they offer?

Securing sensitive data is a necessity for any business that accepts payment cards. The fallout from a card data breach can be devastating and long-term, damaging to your business’ reputation and requiring costly countermeasures. Although security guidelines and PCI compliance regulations can be complex to wade through, credit card merchant services providers can lend a hand and help you better secure your business.

Find out what types of payment security programs potential providers offer and how they will help guide you through the payment compliance process. Do they provide security monitoring and reporting to help protect your business from a breach? Do they employ proven, secure payment technologies such as encryption and tokenization? Do they offer monetary breach assistance to cover certain costs in the event your customers’ data is compromised? Is the provider certified compliant? Do they offer education and training on payment security issues?

Find out about the security technologies potential providers can supply to help meet emerging threats. There’s no way to completely “future proof" a payment solution, but with a trusted payments partner offering the right resources and tools, you can be better prepared to meet – and mitigate – new security risks.

4. How much experience do they have?

In addition to assessing a provider’s service and reliability record, it’s a good idea to request third-party references so you can get a bigger picture of the provider's experience.

Take some time to ask your colleagues and friends about the merchant services providers they work with. Look for a provider with a proven track record of experience in your industry, as well as one that works with businesses that are similar in size to yours and is flexible in their approach.

Find out about the options you will have to process payments by asking questions. Is the provider compatible with payment gateways to facilitate online transactions? Can they work with the processing equipment you already have in place? Will they be able to accommodate future growth and changes within your business? Gather as much information as you can to make the most informed decision.

5. How simple is their contract?

Whichever merchant services provider you choose, you will have to enter into a written agreement with them. Before you sign on the dotted line, be sure to take a close look at the specifics of the contract. It’s particularly important to note the length of the contract, cancellation or early termination fees and additional fees for support (see above). Look for transparency in fees so you know what you have to pay for and what is optional.

If your business is new, a shorter or no-term contract may be the better option. This allows you to try out the provider to see if they are right for you. Some merchant providers will offer a trial period for their system. Be sure to ask about the cancellation policy so you understand how that could impact your business financially.

Merchant services encompass a wide range of payment services, all which can incur varying costs. In addition to the basic processing fees mentioned above, some providers offer value-added services designed to help a business grow.

Value-added services can encompass loyalty programs, online reputation monitoring, advanced transaction and competitor reporting and insights, marketing assistance, payment security and compliance assistance and more. Some merchant services providers offer various versions of these services bundled into the most basic processing option, while others offer some or all of them individually.

There are many factors to consider when choosing a merchant services provider. While it may seem easy to pick the provider that offers the lowest rates, it’s vital to take a deeper look into the factors that go into providing safe, secure and reliable payment processing. The time you spend researching the right provider for your business will pay off.