Raj Singh’s goal for selecting a credit card processor was simple: Find the best price.
“I was looking for the better rate, with better equipment and printing and better service,” says Singh, owner of three Cafe Tandoor restaurants in Cleveland.
Price is often the driving factor behind the decision for most business owners, but it shouldn’t be the only one.
“Credit card processing is a commodity-type of product,” says Ann Byington, vice president of Fifth Third Bank. “There are banks and private processors whose prices are all similar. What you need to look at is what’s on the service side. Ongoing service is the key to a processor.”
Processors take customers’ credit card payments and reconcile them with the credit card companies. Interchange rates are set by the credit card companies and are the same for everyone, so processor profit comes from additional fees.
Byington recommends asking the following questions when interviewing potential processors:
* Who owns the process? Many banks contract the service to third parties and may not control all aspects of the process.
* What’s included in the rate? “Customers are always looking for a good rate, but sometimes you get a low rate but then get charged for paper and statements,” says Byington. “You may end up with a higher rate than someone with a rate that is all-inclusive. Make sure you understand the different ways processors can charge for their services.”
* Can my existing equipment be used? If you have the machines already, you should be able to continue using them with some reprogramming. If you don’t have machines, find out whether they must be purchased or if they can be leased.
* Who will handle my account? Will you be assigned a local service representative or be referred to a toll-free number?
* Can you provide references? “Any quality company should be able to give them a good sample, typically within their industry,” says Byington. “References are always a good way to go to check on a company’s service.”
Also consider the stability of the company.
“If you are working with XYZ processor, what do you know about them?” says Byington. “How long have they been in business? Are they local?
“The lowest rate doesn’t always mean that’s the best one for the customer.” How to reach: Cafe Tandoor, (216) 371-8500; Fifth Third Bank (800) 972-3030
