Choosing the Right Credit Card Processor for Your Business

Choosing the Right Credit Card Processor for Your Business

ByMickael GibraelPublished:Updated:

Payment processing is one of the most important aspects of any business. Without the ability to process payments, companies can’t make sales or generate the revenue needed to sustain operations. Choosing the right credit card processor for your business is an important decision.

Even though there are many modern payment processing methods, it’s clear that credit card processing remains one of the most popular.

With credit card processing, businesses can accept credit card networks like Visa, Mastercard, Discover and American Express as customer payment methods. They can also accommodate mobile wallets and offer convenient options like Apple Pay and Google Pay.

Businesses must sign up with a provider to use credit card processing. However, the broad array of credit card processing providers and what they provide, in terms of fees, features, services and customer support, makes it hard to choose the right one.

Finding a suitable credit card processor ensures that your business has the payment processing options it needs to thrive.

Credit Card Processing for High-Risk Businesses

If you run a high-risk business, you may have trouble finding a credit card processor willing to work with you. Many processors view high-risk companies as having too high a potential for chargebacks and fraud. As a result, you often have to pay higher fees or may even be denied service altogether for your in-person or online payments.

However, some credit card processors are willing to work with high-risk businesses. Doing some research, you can find a processor willing to take on the extra risk in exchange for a higher fee. You might even negotiate a lower rate by showing the processor that your business actively works to reduce the chances of chargebacks and fraud.

Zenti specializes in working with high-risk businesses. They have years of experience in the industry and offer credit card processing to different businesses, including startups, credit repair companies, online pharmacies and CBD retailers.

What are the Pros and Cons of Different Credit Card Processing Providers?

There are a lot of credit card processing providers out there, and it can be tough to decide which one is right for your business. Understanding the pros and cons of each type can set you on the correct path.

Third-party processors

The main advantage of these providers, such as PayPal, Square, Stripe, Helcim and Stax, is that they’re easy to set up and don’t require a merchant account. However, while credit card processors like PayPal, Stripe and Square offer convenience and flexibility, they also have disadvantages. For example, they typically charge higher fees than other providers and may hesitate to work with high-risk businesses. 

  • PayPal charges a transaction fee of 2.60% + a fixed fee (30¢ if the transaction is in USD).
  • Stripe charges 2.9% + 30¢ per successful card charge.
  • Square has varying fees. Before using Square to process your business’s financial transactions, it’s essential to understand their fee structure:
    • For contactless payments, swiped or inserted chip cards and swiped magstripe cards, Square charges a standard processing fee of 2.6% + 10¢. 
    • If you use the Card on File feature or manually enter the payment information with or without using Virtual Terminal, the processing fee is 3.5% + 15¢. 
    • For invoices through Square, the fees are 2.9% + 30¢ or 3.5% + 15¢, depending on whether you use the Card on File feature. 

Credit card processing fees can add up quickly for businesses with a high transaction volume. Additionally, these processors may hold funds for several business days before payout, potentially causing problems for companies that rely on a steady cash flow.

Third-party processors may also limit the amount of money you can process daily or weekly. Limitations like these can be frustrating if your business experiences a spike in sales or needs to process large orders.

Merchant accounts

A merchant account with your bank or financial institution usually comes with lower transaction and interchange fees. However, it can be more challenging to set up, and you may need to maintain a minimum balance in your account.

Service provided by payment processer

A credit card processing service may be provided by your payment processor. Typically, this option has the lowest fees. But, it may not be available for all types of businesses, especially high-risk businesses.

What’s the Difference: Credit Card Processing Company vs. Merchant Service Provider?

Credit card processing providers come in two main types: credit card processing companies and merchant service providers.

Credit card processing companies are typically smaller businesses that process credit card payments for other companies.

On the other hand, merchant service providers are usually larger organizations that provide a full suite of payment processing services, including credit card processing, debit card processing, ACH processing and more.

While both types can offer competitive rates and terms, merchant service providers typically have more experience and resources for businesses of all sizes. In addition, merchant service providers often feature value-added services, such as fraud protection and data security, that can help businesses protect their bottom line.

What’s the Difference: Payment Processing vs. Credit Card Processing?

A payment processor is a company that helps businesses accept credit card payments. They provide the hardware and software to process transactions and manage security and compliance.

A credit card processor is a company that processes credit card payments. In many cases, these two companies are the same.

How Do I Choose a Credit Card Processing Company?

As a business owner, you have enough to worry about without stressing over credit card processing, especially when you have a high-risk business type. But with so many options, you may not know whom to trust with your hard-earned money. 

So, use this list of seven things to look for when choosing the best credit card processing company for your needs.

Affordable fees

You shouldn’t have to choose between feeding your family and accepting credit cards. That’s why you want to look for a provider with reasonable fees that won’t eat into your profits. Before making it official, ensure you understand the markup fee structure and costs associated with the service, such as interchange-plus pricing, interchange fees, transaction fees, monthly fees, cancellation fees and early termination fees. Some processors charge flat-rate pricing, while others have monthly subscription fees.

Fast approval

Nobody likes waiting around, especially when trying to run a small business. So, choose a provider that can approve your application quickly. You want to get back to what you do best.

Reliable customer service and support

Things happen, and when they do, you want someone you can rely on to help you sort it out. By choosing a provider with a reputation for excellent customer service, you can rest easy knowing help is a phone call away. Although availability during standard business hours is essential, a company with 24/7 customer support has more capacity to assist if something goes wrong.

Easy-to-use software

Running a business is hard enough without struggling with complicated software. Instead, look for a provider whose platform is intuitive and easy to use. You deserve to focus on the essential things, not waste valuable time with complex software.

Good Reputation

This one is important. Reputation matters, so selecting a company with a record of good experiences ensures you’re in good hands. Talk to other business owners, and check out numerous options before deciding. 

Security

With data breaches in the news, security is more important than ever. Also, because credit card processing comes with a lot of sensitive information, you want the provider to have industry-leading security measures and Payment Card Industry Data Security Standard PCI-DSS compliance to protect your data. Don’t forget that you need PCI compliance for online e-commerce purchases and in-store sales.

Integrations

Your credit card processor should integrate with your POS software and other apps, such as Quickbooks or Shopify. Third-party providers like PayPal, Square and Stripe have pre-built integrations that make it easy to start processing payments.

Extras

Some companies offer add-ons like loyalty programs or fraud protection. At a minimum, the chosen provider must have the features and services your business needs. For example, if you run a large business, you’ll need a provider to handle high-volume transactions.

Get approved for a high risk merchant account fast!

How Do I Choose the Right Merchant Service Provider?

Merchant service providers and credit card processing companies often have similar services. That’s why the seven factors above can help you narrow your options.

Online reviews can also help you understand ​​what other business owners think of the various providers. Then, you could contact each provider and ask questions about their service before deciding.

Which Credit Card Processing Is Best for High-Risk Businesses?

High-risk businesses have specific needs. Therefore, consider the following four factors when choosing the best credit card processing company for your high-risk business.

The right experience

First, the company must have experience working with businesses in your industry, ensuring they understand your company’s unique challenges and can provide tailored solutions. 

Zenti works with diverse businesses considered high risk, from nutraceuticals and debt collection to adult, e-cig and bad credit businesses.

Fair fees for high-risk businesses

Second, processing fees for high-risk businesses are often higher than for other businesses. The company you choose should have affordable fees that won’t affect your profits.

Security

Third, security is vital when processing credit card payments or online payments for high-risk businesses. Your selected company must have industry-leading security measures to protect your data.

Excellent customer service

Finally, you’ll want a processing company with excellent customer service. You’ll likely have more questions and need more support than businesses in other industries. Make sure the provider you choose offers 24/7 customer support.

How Do I Choose the Right Payment Processor?

The ideal payment processor for your business supports the type of credit card transactions you’ll be making.

For example, if you run a retail business, you’ll need a processor that can work with point-of-sale POS systems. Do you want a physical terminal or a mobile credit card reader? A physical terminal is ideal if you have an in-person brick-and-mortar location, but a mobile processor may be better if most of your business involves online payments.

You’ll also need to decide whether you want an all-in-one solution that includes a merchant account, payment gateway and e-commerce shopping cart or if you’re comfortable using multiple providers.

What Are the Best Credit Card Processing Providers?

The best credit card processing companies offer the latest features and technologies to help you run your business more efficiently. Ask about tracking tools, mobile payment options and fraud protection measures.

How Do I Choose the Right Credit Card Processing Company?

Choosing the right credit card processor is vital to the success of your business. Use the following three questions as your guide.

What are your processing volumes and average ticket size? 

Your processing volume is the number of transactions you process in a month, and your average ticket size is the average amount per transaction. Knowing these numbers will help determine which pricing model is best for your business.

What features do you need? 

Does your business require online reporting? Do you need an in-store point-of-sale terminal or a mobile card reader? Make sure the company you’re considering can provide the features you need.

What are the fees? 

Credit card processing companies make their money by charging fees. Some charge monthly fees, some charge per-transaction fees and others charge a mixture. Understand all the costs before you sign up with a company, and check for hidden fees.

Choose Zenti for Your Credit Card Processing Needs

Choosing the right credit card processor is essential for any business, especially for high-risk businesses. Unfortunately, traditional processors often reject high-risk companies, making it difficult to find a provider that meets their needs.

Zenti is a leading credit card processor for high-risk businesses. We’re experts in handling high-risk merchant payment processing and work with various high-risk industries, both big and small. 

For high-risk merchant payment processing, nobody does it better than Zenti. Contact us today.

Having trouble getting approved somewhere else? We specialize in high risk. Apply today.

High-Risk Credit Card Processing

High-Risk Credit Card Processing

Table of Contents

If you want to stand your own among the competition, the ability to accept and process credit cards quickly, securely, and wherever your customers shop (mobile, online, or in-store) is an absolute must for your business. The problem for businesses of all sizes is choosing the right credit card processing service to help them meet that need.

What kinds of businesses need to process credit cards?

As fewer people carry cash, the need for businesses to accept card payments in a variety of ways is growing by leaps and bounds. Even industries that were once reluctant about credit card processing are beginning to see the demand growing to reach virtually every sector.

Government Agencies

Government agencies abound in the U.S. and they, too, are beginning to see a genuine need for the ability to accept credit cards, checks, and various other methods of payment (including touchless payment options powered by near field communication, like Apple, Samsung, and Android Pay services). Government agencies that deal with numerous individual transactions often need credit card processing, including:

  • Child support and welfare
  • Tax and revenue
  • Transportation
  • Labor and employment
  • Public assistance

Retail Establishments

Retail businesses undoubtedly face the greatest demand for versatility in payment processing. Your businesses see the widest variety of customers and you need to be able to take care of them efficiently and effectively, regardless of which payment methods they prefer. Businesses that cater to younger audiences need access to the latest technology from their credit card payment processor to accept payments at the register, online, and on-the-go.

Nearly every industry has some form of retail—many of them operating at lightning-fast speeds. You need credit card processing equipment that can keep up with your needs to serve your customers as well as your customer’s demand for fast service.

Petroleum Industry

Businesses in this industry fuel the world and you need more flexible options from your credit card processor than most businesses. Rewards and loyalty programs, mobile apps, gift cards, credit cards—the petroleum industry uses it all. Drivers are looking to get in and out as quickly as possible, meaning you have to provide a variety of payment processing solutions for greater efficiency and better expense tracking and reporting at places like:

  • Truck stops
  • Fueling stations
  • Convenience stores
  • Pay-at-the-pump operations

Grocery and Supermarkets

Grocery stores and supermarkets have somewhat unique needs to consider when it comes to payment processing. Since many grocery stores process EBT payments, you must be able to process them accurately and keep outstanding records of transactions from EBT processing. Of course, this is in addition to the usual payment processing needs of retail environments that include credit cards, debit cards, gift cards, and checks.

Hospitality Businesses

The hospitality industry encompasses a wide range of businesses that often have unique needs for payment processing. Things like in-room services, tips, spa services, room service, etc. can throw some credit card processors into a bit of a tailspin.

Effective payment processing is about so much more than the simple ability to accept transactions tendered with multiple types of currency. You need a processor that offers sensible payment processing solutions that accommodate all these things while managing rewards points, credit cards, gift cards, checks, debit cards, and more with accuracy and speed. This keeps your customers happy without the worry of billing errors, allowing you to take care of them efficiently each time they visit your business.

What pricing structures are available for credit card processing?

With customers carrying less cash and online shopping skyrocketing, it goes without saying that it’s more important than ever to accept credit cards. But merchant accounts with many credit card processors can be expensive—especially for a small business—unless you know what to look for.

Flat Rate Pricing

A relative of percentage markup models, flat rate models charge an additional percentage on top of the interchange for each transaction. However, no matter which card is being used, you’ll be charged the same percentage. This allows for simple, transparent pricing every time. Cards with high interchange rates are still charged the same percentage markup, which can get pretty significant in comparison. For example, if your flat rate is 2.3%, even if the interchange rate for a specific card is 2.7%, you only get that 2.3% added on.

See our Pricing >

Zero-Fee Pricing

Offset credit card processing fees by giving customers a choice: when customers use credit cards they agree to pay the fees associated with the transaction. To avoid paying the fee, customers can choose other payment methods (such as cash or debit, for which the merchant pays the transaction fees). This allows you to keep costs low and pass savings on to customers instead of raising prices to cover processing fees.

Interchange-Plus Pricing

Normally pricing models don’t disclose the interchange rate (the preset rate that the merchant service provider pays to the issuing bank), only the rate at which you’re assessed—which gives providers incentive to overcharge for their services. Interchange-plus, however, is the most transparent, cost-effective form of merchant account pricing. This model adds a constant, flat margin on top of the interchange rates. This allows MSPs to price their accounts fairly, because merchants who process at higher volumes will pay more fees, but only proportionately so, while smaller merchants are not penalized for processing minimal amounts.

Tiered Pricing

Tiered rate models organize cards into different tiers and charge processing based on which tier they fall in. But what most merchants don’t realize is that these tiers are arbitrary and determined by the provider. Meaning if your merchant services provider decides to place all the most popular card types in the most expensive tier, you might not realize the reasoning behind their groupings.

Billback Pricing

One of the most confusing billing methods in the credit card processing industry today is the billback method, which can be known by a number of other names including Enhanced Reduced Recover (ERR), Blended Rate, or Mixed Rate. Using billback pricing, you’ll be charged a low, flat rate for every transaction. But since different transactions and card types come with various fees accordingly, the processor will recoup any fee differences by charging you for the difference on your next statement. In the end, you’ll need to save two months worth of statements to track your fees.

What do these fees on my credit card statement mean?

Any additional fees on your statement vary based on your merchant services provider. Some fees and surcharges seem straight forward while others come with confusing names or fluctuate depending on how many transactions you have each month. Which is why you should pay careful attention to your monthly bill to ensure you aren’t overpaying for your processing.

Transaction Fees

Associated with each credit card transaction you process, these fees can be broken down into interchange and cents per transactions (both of which are the only mandatory fees associated with credit card processing and set by the credit card companies themselves). Essentially, you’re paying Visa, MasterCard, and all the others for the ability to accept their cards. If the card issuing bank offers rewards, cash back, and other perks, the interchange rates could be higher to cover the cost of maintaining that card. Which positions debit cards as the lowest transaction fee, and business credit cards typically as the most expensive to process.



Recurring Fees

In addition to interchange rates, many credit card processors tack on merchant fees to make extra profit, billing them as any number of things on your statement. Keep an eye out for lines on your monthly statement like minimum fees, statement fees, batch fees, IRS report fees, annual fees, or anything else that seems a bit random — these are never actually required in order to accept credit cards.



One-Time Fees

In addition to recurring fees, your provider might charge you fees triggered by individual actions. These show up on your statement as line items like terminal fees, set up or termination fees, address verification fees, or chargeback and retrieval fees. Keep an eye on you statements to make sure you’re aware of what you’re paying and why.

What should I look for in a credit card processor?

Not all credit card processors are created equal. It’s not merely about the fees that are charged and how well you understand those fees. It’s about the level of service, security, and integration you can expect from the company that provides your payment processing services.

  • Versatility. It’s important to choose a processor that works with all major brands and multiple payment types (checks, credit cards, fleet services, contactless and chip reader, gift cards, and more).
  • Support. Look for payment processors that offer technical support on your terms. Especially look for those that offer it when you’re likely to need it since emergencies never seem to occur during usual office hours.
  • Speedy. Prompt processing and authorization is essential. Don’t forget to consider prompt payments as well. The faster you have access to your money, the better it is for your business.
  • Secure. In the day and age of big, bold data breaches, you want to know that the company handling payment processing for your business offers security you can depend on and meets all industry standards for PCI compliance.
  • Customizable. Your business is unique. This is why you need a payment processor that offers the versatility to meet the unique needs of your business. It’s not only about accepting a variety of payment types, but also about easy integration with your existing POS equipment, software, and other technology.
  • Transparency. There are few things more disconcerting to businesses than not fully understanding the fees or costs of doing business. Look for payment processors that explain their charges completely and offer complete transparency in their billing practices with no hidden fees or surcharges tacked on.

Choosing a payment processor is important for your business. It establishes what types of payments you can accept and how. Don’t forget to pay attention to things like whether or not a payment processor can work with your existing equipment or if they offer equipment you can use to meet the evolving needs of your business and your customer base.

Contract Length

You don’t want to be locked into a long-term contract, especially if it comes with a hefty cancellation fee. What starts out as a great relationship with your merchant services provider might change down the line as your business grows and your needs change. Say goodbye to cancellation fees and find a partner like Zenti that offers their services with the flexibility of no long-term commitments on a month-to-month basis.



Flexibility

Look for more than a variety of payment processing types (NFC, EMV, checks, debit cards, gift cards, and loyalty and reward payments), but consider how easily your credit card processor will blend with your existing equipment. At BankCard, we offer access to more than 175 gateways and incredible versatility by integrating with 99.99% of POS systems to work with what your business needs.



Equipment

Some credit card processors will require you to rent or lease their equipment, tacking on more fees and surcharges to your bill. Others, like Zenti, integrate with your existing equipment or handle all of the reprogramming needs. If new equipment is needed, service providers like BankCard offer free top-notch equipment and solutions for payment processing (you read that right: no renting or leasing!).



Security

Fear of data breaches has kept many businesses from finding credit card processing solutions that fit their needs for far too long. You shouldn’t let this fear hold your business back from reaping the rewards of accepting credit cards in a manner that suits you, whether online, in-store or on the go. With state-of-the-art technology and tools from processors like BankCard Services to keep your customers’ information safe, you’ll meet (or exceed) the industry standards for security.

You know that accepting credit card payments is inevitable and good for business, but the hardest part can be choosing a processor. Are you confident that your processor is charging you fairly? Make sure you know what’s on your statement—find a merchant services provider that you can trust to design a plan with your needs in mind. Contact BankCard Services to get started with your customized processing plan today.