Knowing which questions to ask will ensure the smooth operation of your merchant account for years to come.
Have you ever been in a position to buy a new product or service and thought to yourself: “I don’t have enough information to make a decision?”
Maybe something just didn’t feel right because you didn’t understand all of the features and benefits of the product/service.
Asking questions can help uncover important needs in order to make a decision.
The list of questions below are compiled both from those who have used merchant accounts before and ran into problems because they didn’t know the right questions to ask.
- Do you offer next day funding?
- Is there a contract cancellation fee? If so, how much is it?
- Will there be monthly and daily transaction volume limits?
- What is the standard customer service protocol if something goes wrong?
- Will I receive online reporting as well as paper statements showing my monthly transaction volume and fees?
- How is PCI compliance handled?
- What happens if my business outgrows the pricing and equipment that I have?
Additionally, the answers to these questions are made up from field research by professionals who care to give their clients a merchant account that will fit their needs.
Let’s find out the answers.
1. Do you offer next day funding?
Most merchant processing companies typically require a 24-hour hold time which means that you see your money in 48 hours. For example, Monday’s batch will be held for 24 hours and sent to your bank on Wednesday.
With next day funding, the 24 hour hold is removed and your batch will be sent through the very next day which means you get to use your operating capital faster.
Often times there are time of day deadlines in place in order to make next day funding possible. For example, you might have to close your daily batch by 6:00pm in order to see your money the very next day.
If you don’t close your batch by 6:00pm then the merchant account provider will carry your batch over to the next day and deposit to your account the day after that.
2. Is there a contract cancellation fee? If so, how much is it?
This one is pretty straightforward. Simply ask for clarification on how long the contract lasts and how much the penalty will be should you decide to terminate service prior to the duration of your contract.
Cancellation costs are pretty common among providers and usually range from $95 to $350. These cancellation fees are in place because of merchant account provider holding costs and risk related requirements set by Visa/Mastercard associations.
However, some providers will waive them if you ask.
3. Will there be monthly and daily transaction volume limits?
Most of the time when you fill out the merchant processing application you will be asked to provide an average ticket amount and an estimate of monthly volume. These numbers are used to set fraud alerts which are put in place for your protection.
If you estimate to process $20,000 per month in credit card volume for example, and your business does $50,000 the very first month, you may get a call from the merchant account provider asking for clarification on why the volume is different from your estimate.
It doesn’t necessarily mean that you will be penalized. Again, these measures are in place for your protection. As your business grow those benchmark volume limits can also be increased.
In some cases business owners violate merchant account terms of service and subsequently daily and monthly transaction limits are put in place.
This usually occurs only in cases of excessive chargebacks or high risk businesses.
4. What is the standard customer service protocol if something goes wrong?
(e.g. terminal repair, missing transaction deposit, updating bank account information, etc…)
This one is very important to know. You don’t want to be left high and dry if something goes wrong with your account.
Will you be provided with a dedicated customer service representative, perhaps your sales agent?
Is there 24-hour technical customer support for terminal and equipment questions?
Is there email support offered?
Is there a fee for customer service or is there a charge?
Knowing exactly who to turn to when you have an issue with your merchant account can be THE MOST crucial element of selecting the right provider. Make sure you know who to call in the event of an emergency.
5. Will I receive online reporting as well as paper statements showing my monthly transaction volume and fees?
You might be surprised at the number of merchant account providers that don’t send monthly statements.
Selecting a provider that will send you statements that show your monthly volume along with applicable fees is important when it comes to tracking your effective rates.
If you prefer to get paper statements the old fashion way (through the mail), you might have to specifically request that because these days many providers are turning to e-statements.
It is also possible to get both online statements as well as paper statements. Be sure to ask if there is a cost for either or both of those options.
6. How is PCI compliance handled?
The payment card industry regulates that every merchant service provider must have PCI compliance guidelines in place. Usually, this is completed by taking an online survey and upon completion of the survey a compliance certificate is issued.
The compliance certificate needs to be completed once per year and without it a non-compliance fee is usually charged. The non-compliance fee usually ranges from $9.95 to $24.95 per month.
Make sure that you understand when you must complete the PCI compliance certificate in order to avoid additional charges.
7. What happens if my business outgrows the pricing and equipment that I have?
Since pricing is customized and specific to variables that can change over time, it’s important to know that your provider is willing to grow with you.
As your volume grows a merchant account provider that values your business will be happy to renegotiate fees and costs as your business expands.
The List Goes On
As I mentioned, everyone’s business is different and unique. If you have questions that you would like to add to this list, please feel free to leave a comment below.
I have additional questions in my archives but these are among the most important ones to know.