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6 Credit Card Processing Scams to Avoid

6 Credit Card Processing Scams to Avoid

Selecting an appropriate credit card processor can be difficult for entrepreneurs. Know which scams to keep an eye out for and ways to stay clear of these.

  • Processing of credit cards is required for every business that accepts debit or credit card transactions.
  • However, fraud is a common occurrence in the processing of credit cards and many small-scale entrepreneurs are a victim.
  • When selecting the credit card processing service provider, be sure to verify that the legitimacy of the company by reviewing reviews from customers along with Better Business Bureau information.
  • This post is written for those who run businesses and want to be aware of common scams to be aware of when considering an online credit processor for their business.– If you’re looking to remain ahead of market in any sector that you are in, you must take credit card transactions. Many business owners are aware that credit card transactions are so common that businesses that only accept cash could be an obstacle for many customers. That means you’ll have to locate an online credit card processor and the process could be a little difficult.

Processors of credit cards are aware of the flexibility they have when it comes to charging businesses for their services. Unfortunately, they also profit from the business owners. This article will look at the most prevalent frauds involving credit cards and the steps you can take to stay clear of them.

How do you choose the right credit processor for your card?

Every credit processor that you find offers a variety of options for pricing and features might not be required. To make the decision process simpler to navigate, here are three things to keep in mind as you evaluate your choices.

  • Price: A good rule of the thumb is to avoid processors that have prices that the processor is able to alter at their own discretion.
  • Purchase: Avoid processing companies who try to convince that you lease terminals because this could increase the cost by thousands.
  • Support for customers Research to ensure your processor has live customer service during your working hours.

Although these points can be helpful but they do not cover the tactics that certain credit card processors might try. Let’s take a look at the details of the most frequent frauds you might encounter in your research.

Hidden transaction fees

Certain payment processors offer low-cost quotes to draw business owners, later add charges depending on the type of transaction. Therefore, it’s recommended to stay clear of credit card processors who offer price tiered models.

Tiered pricing refers to the fact that the processor divides your costs into three distinct categories, based on the kind of payment method employed such as qualified, mid-qualified and non-qualified. Transactions with debit cards are typically included in the low-cost qualified level. However when your company accepts transactions that are not card-based, such as Apple Pay, the processor might classify it as a non-qualified purchase. Typically, non-qualified or mid-qualified transactions have significantly higher costs that build to the total over time.

How can you avoid paying the hidden transaction costs

The best way to stay clear of fee-for-transactions that are not disclosed is to select a credit processor that has an unrestricted fee. If you decide that you’d like to try the tiered pricing option make sure you review the fine print prior to signing an agreement. If you’re interested in learning more, read these strategies to cut down on your processing charges for credit cards.

Equipment leasing

Try to stay clear of the lease of equipment with credit card processors even when you don’t have the money to buy the equipment. If you discover you’re being contacted by a credit card company you’re thinking of using has you signing a lease agreement to rent equipment the best option is to continue looking.

Lease equipment isn’t expensive upfront however, in several years, you’ll be spending thousands. However buying a credit card terminal will typically cost about $300. Equipment leasing boils down to this What would you rather pay $300 or $4,000 to purchase your credit terminal for your credit card?

How do you avoid leasing equipment

What should you do in the event that you don’t have enough money to buy an equipment? A short-term rental of a terminal might be something worth looking into. Another option is to re-programme the equipment that you have. If you’ve got between $100 to $300 it’s best to conduct your own research and locate the credit machine which is suitable for your company’s needs prior to speaking with the processor regarding leasing options.

Hidden surcharges

Once you have all the information regarding your transaction’s rates Be sure to inquire about any surcharges. It’s not unusual for processors of credit cards to add charges that aren’t listed in their rates.

As you’re able to imagine, fees could significantly increase the cost of your monthly bill and add hundreds or even thousands more than you anticipated in the long term. When you read your contract be sure to read”surcharges” in the “surcharges” area to see the total amount of any additional fees your processor is charged.

How to stay clear of surcharges

Apart from studying the fine print in the contract There are many other options to stay clear of surcharges. Choose a credit card processing company that doesn’t charge cancellation fees. This way, if the first bill you receive is higher than you anticipated and you’re not able to pay it, you can find another processor. Make sure to select a company that you are able to pay monthly to avoid unexpected expenses. In the case of a sole-preneur you may want to look into the possibility of a processor without contracts, such as PayPal. Learn more about the service it offers through the PayPal Review.

No customer support

Find out about the hours of customer support before signing an agreement with the processor of your credit card. Some sales reps may persist up until the time you agree to the agreement however, once you sign it the process becomes extremely difficult to get assistance.

This is particularly frequent when a credit card processor contracts out sales representatives and customer service reps. This is because the reps focus only at the amount of commissions they’ll earn from a sale. Once they’ve got the deal, they disappear.

How to prevent a deficiency of support

To prevent this fraud Be aware of this scam and do your homework. Ask for the opinions of business owners that work in conjunction with the processor of credit cards you’re thinking of using. It’s recommended to look up online reviews on reliable websites like The Better Business Bureau. A good guideline is to check their website for resources on the internet for example, an area for commonly asked questions, or blogs.

Over-scheduling the process of selection

Do not let a prospective credit card processor pressure you to sign an agreement. If the salesperson you’re working with attempts to pressurize you with dates or offers that are limited in time beware of it. It’s an alarming warning sign.

However, this doesn’t mean that the credit card processors should not make you aware of offers that are exclusive to them. However there is no need for a company to use offer deadlines to pressure you into choosing these offers. When choosing a credit card processor you’re searching for a partner to your business, therefore be patient.

How can you avoid being pressured into the process of

Beware of the scam and take the time to study several credit card processing companies. If a credit card processor appears to be the most suitable option, you should continue to investigate two or more processors. If you do make a choice make it based upon your research and do not take the pressure of an agent of sales.

POS software

Another strategy that credit card processors might employ is selling you a particular point-of-sale (POS) programs. The fact that the program will handle all your business’s needs could seem appealing. The issue is that the software raises costs up as it’s an additional expense that the credit card processor could add to your account.

Credit card processors are aware that businesses have the option of leaving when they find an alternative. If you’re making use of your POS software, it can make it more difficult to quit. In the end, do it be worth your time to endure the stress of starting over from scratch when everything is functioning?

How to stay clear of POS software frauds

If the credit card processor you are using provides POS software, make sure to inquire whether the program works with different payment processing companies. If the answer isn’t that’s a big alarm. Although it may appear appealing at first due to its convenience, however, there’s a good chance that it will cause you a lot of stress and cost you a lot of money in the end. There are also credit card processors that do not cost for POS software. Take a look at the reviews of Square to see an instance.

Locating a credit card processor that is legitimate

In other words, you’ll need to do your research about a company before signing the contract. Are that credit card processing company that you’re looking at an established company? If you’re struggling to figure this out, have a review of this listing of most reliable credit card processing firms.

Even with the top processors the service agreements are often lengthy and somewhat complicated for an experienced business owner. Do not be tempted to ignore the information. Before you start your search, make sure you know what you should find in the payment processing agreement. Selecting the right processor is a crucial choice that could either improve business operations or create an excessive quantity of pressure.

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