Merchant Services Credit Card Processing Guide

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You’d never show up to a car dealership without a general idea of what kind of car you want. It’s a good idea to research a service or product before buying. Merchant services credit card processing is very similar. You should know the terminology, the kinds of requests to give your payment processor, and what qualifies as a good merchant services company.

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Credit Card Processing Terminology


Stands for Automatic Clearing House. This is an electronic funds transfer system used by Federal Reserve controlled networks.

The Acquirer:

This is also sometimes known as the Acquiring Bank if you process your payments directly with your bank. The Acquirer works with both the card brands and your business bank account. All merchant account providers are backed by an acquiring bank so the funding is FDIC insured.

Merchant Terminal:

A merchant terminal is also known as a credit card terminal. It is the hardware or Point of Sale terminal that your customers swipe their cards with. You can also set it up on a work computer or mobile phone or tablet accept and read credit cards.

Virtual Terminal:

This is a web-based program that performs the same function a regular merchant terminal does. You can process credit card sales inside a virtual terminal using your internet browser to log in securely.

PCI Compliance:

Payment Card Industry Compliance standards that your business should aim for to avoid unnecessary monthly fees and also to prevent a data breach.

What to Request From Your Payment Processor

As with any investment into your business, there should be a fair level of communication. You may not be able to haggle on the price with some merchant services credit card processing companies, but you can customize some aspects. Tell your agent your wish list of features. For example, you may want next-day funding, month-end billing, the cell phone number of a local rep, 24/7 customer support, hardware functionality, and software reporting features.

No Contract:

We strongly suggest avoiding business with a merchant service provider that requires a term contract. Far too many business owners sign for 1-4 years with a company and don’t hear back from them until their contract is up. If you sign a contract with no exit fees, however, you know your payment processor will work every day to keep your business. Additionally, be wary of companies or agents who verbally promise no contract card processing because they may hook you with an equipment leasing contract. Make sure you read documents before signing, especially the fine print.

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Speaking of equipment, ask what kind they have available. There’s standard desktop terminals, and there’s Smart Terminals. Try to find a merchant service provider who gives you hardware options. Maybe you can’t afford a Smart Terminal right away, that’s fine! But, make sure to ask if you can get discounts based on how many transactions your run a month. You just might land some free equipment.

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Ask for a Quote:

The teaser prices on the website aren’t always what you’ll get. If they don’t have prices on their website, what are they hiding? You should ask for a formal written quote so that you can compare companies. Most often the full pricing appears on a document called the “Merchant Application and Agreement.” Make sure to request the quote to be in the interchange-plus pricing model. It can be hard to read at first, but it is the most transparent pricing model and should give you the most control to keep your costs low.

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Merchant Services Credit Card Processing Qualifications

What qualifies as a ‘good’ merchant service provider? As mentioned above, a PCI compliant company with honest pricing and safe technology is important. What separates good from great, however, is being an Electric Transaction Association Certified Payment Professional. This requires passing numerous tests and keeping up with yearly training. Also, look for an A+ rating from the BBB and U.S.-based customer support. You’ve got some basic terms under your belt, a great wish list, and a business that’s ready to thrive! You’re ready to start the hunt for merchant services credit card processing, and what better place to start than a phone call with a PayFrog representative?

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