3. Is the processor’s pricing interchange-plus?
Interchange-plus pricing provides transparency into the interchange fees charged by credit card issuers. It also specifies how much you pay the payment processor in fees. This pricing method lets you keep track of your spending and avoid overcharging.
4. Are there any penalties for contract termination too soon?
Contract termination fees might vary considerably. They may charge between a couple hundred and a couple of thousand dollars. Look for contracts that have a cancellation fee of less than $400.
Avoiding Red Flags in Credit Card Processors
A liquidated damages termination fee is an early contract cancellation process in which your company may be charged the full expected price of the contract. If you cancel during the first few weeks or months, you may be penalized for a breach of contract and the loss of fees that the merchant account processor would have received.
Nonqualified rates are another red flag to be aware of. Nonqualified rates are costs charged for specific transactions, such as a consumer’s credit card payments over the phone. These fees can range from 5% to 8% and can be applied to various transactions. Request a sample monthly statement from the credit card processor so you can see what itemized costs there are for transactions and ask the necessary questions to understand their services better.
