Are you planning to start an online business? Well, you are going in the right direction as in this modern era, online merchants are experiencing remarkable growth. But, starting your business in digital form is not as easy as it sounds. You need to have certain things and a credit card processor is one of them. Well, a credit card processor is something that actually allows the merchant to accept online payments made using credit cards, debit cards, and other online payment modes. If you have a retail outlet and want to accept online payment, you need help from credit card processors.
Now, there are many fees that are associated with credit card processing. Many merchant processors do not reveal this in the initial step and this is where they are misleading the merchants. We at Rapidcents understand this very well and therefore, we will let you know about the misleading techniques used by the credit card processors. But, before getting into that particular thing, you must know how the online payment actually works.
Credit Card Processors And How Online Payment Works
In this competitive world where customers are giving preference to those businesses that are providing the ultimate convenience, you need credit card processors. Yes, it will add a completely new and beneficial dimension to your business. Customers are making a payment with their credit cards and debit cards and the merchants are getting the amount in their account within 1 or 2 business days. Now, if you are a merchant, you should definitely know how the whole thing works.
The entire thing starts with the customer when he or she initiates an online payment by putting card details on the online checkout page or swiping cards in the physical payment equipment. The information of the cardholder’s credit cards or debit cards remains encrypted. The payment gateway actually sends this encrypted information to the credit card processors. The payment processors forward the information to the card brands and the banks. The credit card brand of the card used by the customer checks the information and the bank also check the funds. After this, the bank gives the green signal checking the available fund. The card brand and then the merchant processors get the information. Then, it makes the payment settlement.
So, there are so many organizations involved in this process. It looks like a real-time process that takes 5-6 seconds to get completed. But, the fact is that these organizations make this process successful and this is why the merchants need to pay certain fees such as gateway fee, card brand fees, and many more.
The misleading techniques that credit card processors use are as follows:
Teaser Rates: When you see the advertisement of the credit card processors, you will see they are charging very low. But, this is not completely true as they do not reveal certain other fees such as mark-ups, card-brand fees, assessment fees, and many more during the time of advertisement. So, when you are choosing a credit card processor for your business, you should ask for all the hidden fees.
Interchange Differential Pricing: Well, this is another tactic that credit card processors are using. They will tell you that a small percentage will be charged if customers use any premium credit cards for making payments. But, when you will get the print, you will see that the charge is taken on the mark-up charge. In other words, the payment processors charge the merchants twice in the case of processing premium card transactions.
Monthly Minimums: There are monthly minimums that merchants will have to pay. Well, this charge is on the entire fees generated from MasterCard and Visa transactions. In other words, you will have to pay a specific amount every month even if you do not process enough payments. Many credit card processors also call it ‘low achiever fees’.
Contract Cancellation Fees: Contract cancellation fee is another misleading technique that credit card processors are using. First, they will try hard to utilize long-term contracts. Instead of providing satisfactory service, most credit card processors try to focus on implementing long-term contracts. As a result, merchants do not get good service and they cancel the contract. In this regard, they need to pay contract cancellation fees.
As of now, you have understood the misleading techniques used by credit card processors. So, always check these things before choosing the payment processor for your business.
Not A Rapidcents Merchant?
Well, if you are looking for a loyal and reliable payment processor, you should definitely choose Rapidcents. This platform has already made many merchants happy with their top-notch service. They provide all sorts of services such as a virtual terminal, chargeback preventions, credit card processing, and many more. If we talk about customer service, it is available 24×7. Therefore, don’t wait; join it today.