Learn About Merchant aggregators
Payment facilitators – also called mobile credit card processors or merchant aggregators – sponsor multiple merchants under their master merchant accounts. This makes it easier to sign up for an account, and there are fewer fees to pay, but they can be more restrictive.
Make sure to carefully read the user agreement to ensure the goods or services you provide aren’t prohibited. Additionally, be aware that processing irregularities – such as abnormally large transactions or a sudden spike in monthly volume – may cause your card processor to freeze your funds, which can restrict cash flow.
Key takeaway: If you have small sales tickets, you can save money by choosing a credit card processing company that charges only a percentage of each sale. Some also charge a small per-transaction fee – usually 10 to 30 cents – but this adds up quickly if your sales tickets are small.
Larger monthly sums
If your small business processes more than $3,000 per month or has large sales tickets, consider a processor with lower rates like Payment Depot (read our review of Payment Depot). These payment processing companies can install a merchant account for you.
Even though these processors may charge fees that the aggregators don’t, they offer lower rates, which saves you money when you’re processing larger sums of money every month.
ISOs and MSPs
Independent sales organizations (ISOs) and merchant service providers (MSPs) that resell merchant accounts from direct processors offer credit card payment options for your small business, too. Because you’re still processing a lower payment volume than large businesses, you’re not likely to get better rates from direct processors. Even so, you’ll want to shop around to find low rates, few fees and a month-to-month contract.
Tip: If you process a low volume of credit cards each month, look for a payment processor that doesn’t impose a monthly minimum – a minimum dollar amount of credit card processing fees you must generate each month.
If you process a high volume of sales each month, you could also consider working with a direct processor like First Data, Wells Fargo Merchant Services or Bank of America Merchant Services. These companies tend to be better suited for large businesses, but they will also work with your small company.
Direct processors provide merchant accounts, and have relationships with banks and credit card brands. Again, you’ll want to comparison shop for favorable rates, fees and contracts.
If you are looking for a point-of-sale system (POS), check with the company to find out which credit card processors the POS system is compatible with, as that may limit your options. Some require you to use their in-house processing services, but the best credit card merchants allow you to work with third-party payment processors so you can shop around for low rates and fees.