In part one of this multi-part blog series, we went over some of the basic steps for protecting your business from credit card processing scams certain dishonest individuals or entities may try to run. Credit card processing is a realm that contains quite a bit of money, and sadly this makes it a target for some scammers who may attempt a few different tactics.
At Merchant Card Advisors, we’re proud to offer a wide range of credit card payment processing services, from mobile credit card processing to numerous other types your business might be in need of. In today’s part two of our running series, we’ll go over a few tangential areas of concern – these aren’t necessarily full-on scams, per se, but they’re still iffy practices you shouldn’t expect from most reputable credit card processors and themes that might make you consider an alternative service.
Rate Increase Concerns
It’s vital to review your contract with a payment processor in detail before signing it, and one major reason is to avoid allowing a processor to raise your rates at their discretion. Rather, you need a processor that offers month-to-month terms, allowing you to either leave or renegotiate at the end of a given month.
Instead, though, some processors maintain the ability to raise rates whenever they want. In such cases, they will often start you with a very low rate that gets you excited about signing up, but then quickly raise your rate and force you into a poor situation using the contract you already signed. Be sure to read the fine print.
Applications Vs. Contracts
Another contract-related issue to be aware of is processors who require a business to file an application that’s actually a part of their contract. As soon as you sign this, then, you’ve partnered with this processor, even if you were under the impression you were still in the application process. Some will go even further, refusing to give you a price quote until you fill out the application (which is actually a contract).
Simply put, you should not sign such a document. You should have the ability to review the full application, plus terms of service, the program guide and a complete price quote, before putting your signature on anything.
Another situation that is certainly not a scam, but is one you should avoid if you can manage it, is an equipment lease from a payment processor. For businesses without the funds to purchase their own processing equipment, such leases are sometimes used – but in reality, these materials are not that expensive, and chances are you’ll spend a lot more on such a lease over a period of months or years than you would have if you just bit the bullet and bought your own equipment early on.
For more on avoiding scams and other issues within the credit card processing realm, or to learn about any of our credit card processing services, speak to the staff at Merchant Card Advisors today.