While choosing credit card processors, it is important to determine the value you are going to drive from them. Simply considering the lowest price quote may not lead to good value for your money. Rather a lower price quote can be a big trap. The overall experience and value offered by your payment processor is something that counts in the long run. So before you take any decision, properly assess the potential risk and rewards associated with your decision. In order to assess the risks associated with a processor, the best way is to browse through the online complaints against the processor posted by the merchants.
Yes, when you analyze those complaints, you will find that some of them are regular complaints, whereas some might be genuine red flags. Here, you should focus your attention on the red flags because these are the things that will help us take an informed decision.
1. Complicated contract cancellation
Many processors charge an early contract termination fee, but it happens when they charge an annual fee. If the processor doesn’t charge an early cancellation fee, they might be charging on month to month, which is far better than the annual contracts, if you are using their services for the first time. Charging an early termination fee is actually an unfair business policy. They make their cancellation process so complicated that when you decide to cancel, they keep you bouncing from department to department till you finally give up. It is also important for the merchants to get the contract cancelled in writing, because sometimes the processor will continue to charge you despite your verbal agreement to cancel the services.
2. Volume and nature of complaints
The ratio of number of complaints to the processing volume also does matter. While scanning through complaints, it’s important to remember that payment processors with 1000 clients and 100 complaints cannot be compared with a payment processor with 10000 clients and one hundred complaints. Also have a look at the common complaints. If you happen to see a number of complaints around a common issue, it can be a red flag.
3. Misleading advertising and unethical sales practices
These are some of the most common complaints made by the merchants all over the world. The underlying reason for these practices is the excessive focus of payment processors on sales. They have tiered pricing systems and the advertised rates are often not the effective rates, because many merchants are disqualified for the advertised rates. These are some of the most deceptive techniques used by the salesy payment processors. It is advisable to go through the fine print and not rely on what their sales representatives claim or say, because these guys are under extreme sales pressure and they often provide false facts to the customer. The same is true about independent retailers. Beware of their deceptive sales techniques.
4.Unresponsive customer support
Sometimes the independent agents promise a lot while closing a sale, but once they close it, the focus shifts to the next sale. They ignore their existing customers, so the customer support takes a backseat and the merchants are thrown from department to department for minor issues. It leads to huge frustration. So never go for the lowest price quote; take the feedback from your friends and colleagues and also browse through the reviews online, so as to make sure that the payment processor you are dealing with offers handy customer service in time of need.
5. Non-cancellable lease agreements
Leasing POS terminals or payment gateways can actually turn out to be far more expensive than buying them. Certain processors force you to make the payment for the entire lease term and therefore they make the contract non-cancellable. Ultimately, their actual cost turns out to be many times more than the actual buying cost of the gateway or processor.
6. Unfair charges and high fees
Most of the complaints revolve around unfair fees and charges. Some payment processors charge their merchants on the pretext of early termination or PCI compliance. For example, the standard fee for early termination is around $400, but you will find several merchants complaining online that they have paid much more in the name of early termination.
7. Keeping the charges hidden
One of the most deceptive techniques used by these payment processors is that they keep many of the charges and fee structure hidden and undisclosed. These charges come as a surprise to the merchant.
If you research a bit, you will find that many payment gateway providers are happy to offer you no PCI and no early termination fees. There is no point paying this fee, which can turn out to be too high if calculated as a fixed percentage of the actual contract.
The payment gateway provider is also a business owner with possibly a lot of issues, sales pressure and unethical practices by their staffers; so discuss everything during the negotiation and see the fine print. If you are not happy and satisfied, decide not to sign the contract.