Welcome, one and all, to our giant list of Myths about Merchant Processing! Here is your one and only stop for any and all myths you may have heard about the credit card processing industry. Ready? Here we go!
The Fees to Process Cards Reduce Profits
While it is true that processing both credit and debit cards involve fees, those fees are miniscule when compared to the number of customers that pay using cards. Additionally, industry research shows that customers are likely to spend 12-18% more when using cards over cash. Finally, carrying cash is becoming a more and more rare occurrence, and not processing cards lowers the overall pool of potential customers for a business to work with.
PCI Compliance is Too Complex
Also wrong. PCI is designed to be easy to implement so long as the business is not also the card processor. By pairing with a third party merchant processor, say with a really Flash-y name, it is quite simple and painless. It also allows you to take card transactions and increase your profits (see the beautiful point above). With the exception of submitting an annual questionnaire and maintaining standard security for your customer’s information, there is no added stress with PCI Compliance. Many merchant processors will help you stay compliant as well!
The Initial Cost of Equipment is High
Really failing here. This is also untrue. The initial cost of equipment, first and foremost, depends on the desired equipment. Sure, top of the line, best of the best, shiny brand new equipment will require a larger investment. However, leasing equipment or purchasing equipment to simply serve your basic needs are also an option and much more affordable. You could spend a decent amount on a Clover terminal, but you could also spend much less on the similarly effective yet much more affordable FD-130 or PAX S80. All of these, by the way, are offered by FlashBanc! Check em out!
High Risk Businesses Won’t Qualify
Also not true. 0 for 4 guys. I’m concerned with the pessimism. Many processors will work with high risk businesses, FlashBanc included. Just because the industry is risky, or your company has low credit, may be in a risky location, or is even a recent startup, doesn’t mean you won’t qualify. It will simply require hard work, sweat, and lots of orange juice.
Contracts With Processors are Locked Up Tighter Than Area 51
Not true on one account. So close though.
1. Area 51 is pretty bad. So this is a bad comparison.
2. Many processors will work with you to get you out of your contract, if there is one. More so, they aren’t that bad to begin with, as long as it’s with a company beginning with Flash and ending with Banc.
Free Terminals are The Best
See, now they’re going in the other direction. While not every terminal will put you on a third mortgage, not every free terminal is the answer. Your needs will vary and some investment may be required to meet those needs.
Accepting Credit/Debit Cards Won’t Significantly Impact Profits
Similarly to myth one, yes, it will. More consumers are purchasing through cards than ever, and not jumping on that train is a huge missed opportunity. Between the increased market and the tendency for consumers to spend more per transaction, processing card transactions will heavily increase your profits.
The Processor With The Lowest Rate is The Best
While lower is better, still wrong. A company with lower rates may not offer the same services as one with higher rates. Additionally, some companies offer flat rates while others offer minimum charges. It depends on the company, as there are a few that offer great services AND low rates, like my favorite merchant processor, FlashBanc.
Mobile Processors Aren’t Worth The Setup
Correct! Just kidding. They are worth it. Mobile terminals allow you to go to the customer, instead of waiting hoping that they find you. While this isn’t perfect for every industry and business, it allows many to take the initiative. Luckily, FlashBanc offers an assortment of mobile processors!
Setup Takes Too Long/Is Too Difficult
This is a long list, and I don’t have the energy to keep telling you they’re wrong. But I will. For your sake. Many terminals are plug-and-play, as in you plug them in, and now its like a new GameBoy. All that remains is to follow it’s simple setup instructions, with a call from customer support. Many processing companies have pretty average support, but the support at FlashBanc is totally top tier.
Every Company Has The Same Rates
No, no. Merchant Processors offer different rates depending on their own model, and may not even offer a rate. They may instead use a ‘minimum charge’ model, requiring a certain threshold of money to be processed, with fees only being incurred should you not reach that threshold.
Every Processor Has The Same Services
How dare they!? Before they were just incorrect, but now they’re being rude. To even suggest that any company offers the same amount of services at the same quality as FlashBanc is unspeakable.
Card Information is Stored On The Terminal
This one we understand. Here we take it as just being ill-informed, but still not correct. Card information is not stored on the terminal, and is only on there long enough for the transaction to take place. It is instead encrypted and then passed along to the processor. No information remains.
Chargebacks Are Common and Costly
While you are right to be concerned with chargebacks, they amount to only 0.5% of all transactions. Additionally, you can take steps to further reduce the occurrence through verification.
Minimum Charges Are More Expensive Than Flat Rates
Still not true. Minimum charges will be more or less costly depending on your average transaction charge. If you have a minimum charge of $20, but have an average transaction charge of $10, then it may be a problem. You’ll need to pay the additional $10. However, if you have a higher average charge, then you will never see that fee.
Mobile Wallets Will Push Out Cards
While the industry is always evolving and is heading in that direction, it took decades to bring cards to their current point. Mobile wallets will require similar infrastructure and will not be the main method of payment for many years, if ever.
Banks Offer Better Rates
Not always, and many processors may work in association with banks. As a matter of fact, while banks offer merchant processing services, the rates are likely to be higher than that of say, FlashBanc.
Your Payments Won’t Finalize
Last myth on the list and they got em all wrong. The terminal obtains authorization for the transaction the moment its processed, which means that your payment is guaranteed.
Don’t be afraid to ask us the hard questions FlashBanc will be there to answer them all! If you have more questions on what you’ve heard on the internet (and let’s face it more people tend to lie on the internet) you can call us any time at 1-800-808-1622!