Growing pains are a part of doing business. As you get bigger, you may outgrow the systems and services that help you be successful. Your merchant payment processor is a perfect example. What you need from a payment processor changes over time as you expand. Having the wrong fit can cost you time and money. You need the flexibility to handle large payments as well numerous payments without delays. You also need adequate chargeback management and fraud protection. This four-question checklist can help you evaluate whether it's time to move on and what to do next.
1. Identify Which Areas You’ve Outgrown
Outgrowing your credit card processor typically means certain aspects of the product or service are hindering business growth or could be soon. Here are some common areas you may have outgrown.
Rates
When you first start making sales, variable payment structures or unclear rate agreements may not be that big of a deal. But as volume and profits increase, those rates may start to really hurt your bottom line. Have rates increased without explanation? Could you do better with a different processor?
Technology
Limited tech tools and payment methods could be slowing business growth without you realizing it. For example, flexible point of sale transactions, mobile terminals, and access to alternative payment methods may not be available with older processors. Are you be missing out on opportunities by not providing these options to customers?
Flexibility
Business growth and adaptability go hand in hand. Look at your business’s goals and projected growth over the next 1, 3, and 5 years. Do your credit card processor’s capabilities align with your plans for the business? Can it handle any adjustments or new services you plan to offer?
2. If You’re Not Sure, Ask Simple Questions
If you’re still unsure whether you’ve outgrown your credit card processor, asking a few more simple questions can help.
Does your credit card processor:
- Save you time and allow daily operations to run smoother?
- Save you money (such as through a cash discount program)?
- Help you attract new customers?
- Help you retain current customers?
- Provide adequate security for your customers and your business?
- Provide excellent customer support?
- Offer customized solutions instead of one-size-fits-all?
If your answer is “no” or “maybe” to some or all of these, your business likely needs a new credit card processing solution.
3. Research Credit Card Processors
If it’s clear by now that you’ve outgrown your payment processor, the next step is to start looking for a vendor that can meet your needs.
As you research, ask questions like:
- Which type of fee structure will work best for your business now and in the future (i.e. flat rate fees vs. interchange vs. subscription)?
- Is the processor willing to take on high-risk accounts, such as startups or membership subscription businesses? Will there be additional fees as a result?
- How protected will you be from fraud prevention?
4. Understand What Switching Credit Card Processors Will Look Like
Switching credit card processors might be simple if you are using something like PayPal or Stripe. But can be more complicated if you have a signed agreement sheet contract with your current vendor. Your vendor may try to keep you from leaving, so make sure you really understand the terms of your agreement and penalties before letting them know you intend to switch.
Credit card processing services with contracts typically require a written document stating your desire to switch vendors. Line up the new services before your switch to ensure a seamless transition. Then, get the information you will need and make the call.
