Merchant bankcard best practices

Consider the following factors when evaluating or selecting a merchant services provider

Tim Black

If you’re currently accepting credit card payments at your place of business, you understand it’s a vital yet potentially expensive necessity. You’ve probably received phone calls from companies you’ve never heard of, promising to save you thousands of dollars annually. Did you know a merchant services contract may be one of the most important documents you and your company can sign? Selecting the wrong provider can seriously impact your bottom line and you may find yourself locked into a long-term contract loaded with penalties. If you’re evaluating your current vender or being pitched by a new provider, please consider these important factors:

Have a trusting relationship with your bank processor.
First things first: you need to have a trusting relationship with your merchant services provider. Are they willing to meet with you in person? Do they ask to train your staff on how to use the equipment and ensure you’re processing transactions at the lowest cost? Do you feel you understand what you’re paying for and how to get the support you need? If the answer to any of these questions is no, then perhaps it’s time to review your existing relationship.

Don’t get caught in a long-term contract without reading the fine print.

Be sure to look for a processor that will allow you to purchase the equipment up front or negotiate it into your processing contract. Companies who make you sign a long-term contract may be hiding something, including a costly payment penalty to get out of the commitment.

Know your fees.
There are literally hundreds of companies selling bankcard processing services and unfortunately many are notorious for hiding fees. It is important to make sure you receive and understand the entire disclosure describing your pricing structure. Go ahead and ask about annual fees, monthly fees, setup fees and compliance fees. Your pricing plan should be presented in a clear, simple, yet comprehensive format. If you feel you don’t understand how the pricing will work, walk away.

The preferred pricing model is Interchange pricing. The term Interchange is equivalent to the wholesale cost that credit cards such as Visa, MasterCard and Discover charge a merchant services company to process a transaction. The processor can provide you with the Interchange pricing chart so that you know up front what each card you take will cost you per transaction.

Know and understand PCI.
Payment Card Industry (PCI) compliance is adherence to a set of security standards that were developed to protect card information during and after a financial transaction. For this, you will need to:

Understand what is considered sensitive data, where it is and who is responsible for its protection.

Avoid storing sensitive data, but if you have to keep it make sure it is secure.

Protect your electronic data with a firewall. Fortify your interior with people, procedures and technology.

Know what customer service options are available to you.
Your processor should have a help desk available to you 24/7 for no additional fees. In addition, the bankcard manager (and if you’re working with a bank, your local branch manager) should be able to immediately assist or direct you to the correct person or department. Value your time.

Get up-to-date equipment.
Technology is constantly evolving. Be sure that your processor is doing all it can to make sure you are the most up-to-date with credit card technology. In October 2015, all card processors will be required to have EMV (EuroPay-MasterCard-Visa aka chip technology) equipment. This is the technical standard that ensures chip-based payment cards (smart cards) and terminals are compatible around the world. A chip-based payment transaction occurs when a microprocessor embedded in a plastic card or mobile phone connects to an EMV-enabled POS terminal in order to execute a payment. The smart card technology provides an addvitional form of card authentication for the transaction – validating the legitimacy of the payment type being used and helping to reduce the use of counterfeit, lost and stolen payment cards at ATMs and retail points of sale.

Select a partner, not a vendor.
Merchant processing is complex and changing constantly. So it’s important to find a trustworthy partner who is always available and motivated to help you and your business be more efficient and profitable.

Tim Black is vice president and merchant bankcard manager for Riverview Community Bank. He can be reached by calling 360.606.6465 or