Having the right questions to ask a prospective credit card processor can help you choose a vendor with your best interests in mind.
Credit cards likely represent a considerable part of your operating expenses. And just like your facility management system touches every guest and every dollar that enters your facility, your merchant services program can significantly impact your operational efficiency, profitability, and even your guest experience. However, many operators dread searching for a merchant services provider. Why? Because we all know a merchant (or have been one!) who has been duped and taken advantage of by slick salespeople and companies who don’t have their clients’ best interests at heart.
But your credit card processing program is too important to your business to avoid taking the time to consider your options. Knowing the right questions to ask can help you make an informed decision and find a partner you can trust. Here are seven questions to help you make the best decision for your business.
No.1: How do I know I can trust you?
Trust is an essential part of any successful business relationship, so be sure that you’re gauging how you feel during conversations with prospective providers. Does the sales representative seem knowledgeable? Can they answer all of your questions? Will they provide a list of other clients that you can contact for a referral? Overall, how comfortable do you feel that they will be client-centric when you need them the most?
No. 2: What are the real costs?
As we discussed in week 1 of our series, many factors can impact the rates you pay. Ask what pricing model they’re using. In our industry, most facilities should be priced using an interchange-plus pricing model. Interchange-plus means that you pay the non-negotiable interchange rate (usually between 1.5-3%, plus any processor fees). Another typical pricing structure is a flat rate model due to payment aggregators like Square and Paypal. In many cases, you’re charged a higher rate to compensate for any outlier transactions.
Don’t be afraid to ask directly about the additional processor fees you’ll be expected to pay. Doing so will help you understand the validity of the company you are working with and the rep’s knowledge. They should know exactly what their costs are and be able to share them with you.
No. 3: What are the contract terms?
Contract terms can vary greatly, but you need to know how long the initial contract length is, the costs for early termination, and what will happen if your facility changes ownership. Terms are typically three years and then auto-renew for 12 months, or they will go month to month after that initial duration. Understanding your term and associated cancellation penalties is extremely important should you need to change based on service, software, or ownership.
No. 4: How are you protecting my business?
You need a provider that is committed to helping you mitigate risk unique to our industry. In addition to technology and devices that ensure you’re processing securely, you need to understand how your provider will help you as technology and standards continue to evolve.
At your point of sale stations and in your CenterEdge Advantage Webstore, you already receive the benefit of end to end encryption. This means that cardholder data is encrypted at the point of payment to the solution provider’s secure environment, where it is then decrypted. CenterEdge Software maintains the highest level of PCI DSS compliance.
With the continued growth in data breaches and fraudsters, understanding what can keep your business safe is instrumental in an effective payment strategy. When a processor compromise happens, merchants often pay thousands of dollars in fines, including those for forensic investigation, consumer credit monitoring, and breach notification. Not to mention the costs associated with legal fees, reissuing customers’ cards, dealing with angry customers, and diminished reputation.
In April 2020 alone, fraudulent credit card transactions increased 35% year over year. With the increase in fraud and chargebacks across eCommerce accounts, one of the things to ask is what additional data security functionality is offered to help reduce risk as it pertains to these transactions. Many processors use basic functionality such as “Address Verification” only. In this day and age, that is the absolute minimum. Security controls need to go beyond the basics to help protect your business, such as offering enhanced fraud protection for online transactions.
No. 5: How are you future-proofing my business?
As the payments industry continues to evolve, processing procedures will continue to change. It’s important to work with a provider that is staying abreast of any changes that will help improve operating efficiency at your park and keep you secure. With the recent pandemic, contactless payments have become of utmost importance to the payment interaction you have with your guests. Supporting this functionality is a must, and having the right partner and technology to do this will keep your staff and your guests safe.
Additionally, offerings like point to point encryption and tokenization are instrumental in how your business will continue to evolve as you look to gain value-added services from your software provider.
But helping you prepare for challenges as they arise is not just about helping you navigate the payments landscape. It’s also about keeping up with amusement trends as they develop. For example, many operators have emphasized gaining recurring revenue and differentiating from their competitors in new ways. Having the ability to sell memberships with recurring billing and tokenized tender gives your facility an advantage, especially when fewer guests are patronizing entertainment venues. You need every tool possible to safely secure your guests’ business and their loyalty.
No. 6: How does this work with my facility management software?
Working with a processor that does not integrate with your software should be a nonstarter. Your software is designed to help you efficiently and effectively manage your business - giving you one source of truth for all the revenue in your facility. If a processor tells you that you can work with them, but integration is outside of your software, this will cause issues in compliance, income visibility, and reporting. Not to mention the time that it will take for your front line staff to have to manually enter information into the terminal, creating duplicate work and a higher margin for error.
No. 7: What happens when I need help?
All reputable processors should offer customer and tech support for no additional charge. They should also direct you to who you should call based on the issues you are having. What are the customer service hours of operation? Will technical support be available during peak times? Are they staffed for holidays? If you cannot get the help you need during your busiest times or seasons, they are likely not the best provider for you.
There is a lot to consider when evaluating your merchant services program, but you don’t have to do it alone. We care about your success and remain committed to providing you with the tools you need to manage your business at the highest level. Let us help you determine the right merchant services program for your business.
To take advantage of your free program analysis, contact us today.
Miss part two of the blog series? Find it here.