Merchant services can be a confusing component of your business. Below is my list of 5 aspects of processing credit cards that every Canadian merchant should understand.
1) Consider buying or leasing the terminal; we come across merchants every day that have been renting the same terminal for ten or even fifteen years! With rentals running as much as $39.99 a month, there are merchants in the market that have paid for their terminal for their 3 times over. Now that most processors are selling EMV chip ready terminals - and EMV will be the standard until at least 2018 - consider purchasing or leasing your terminal. Buying or leasing a terminal ties you to the providers, so make sure that you….
2) Shop Around! You don’t have to get your credit card processing through your bank. In fact the bank - and its processing partner - assume that you think they are the only, or best, option. They may be, but you won’t know until you explore your options. There are a number of merchant account providers that will fight for your business. Make your provider earn your business.
3) There Are Three Rates You Need To Understand. Buying merchant services today is much more complicated than it was a year ago. Previously a merchant only had to understand what their discount rate was, and any fees on the account. Today they need to understand their discount rate, the brand fees or assessments and most importantly adjustment for cards that do not qualify for the discount rate, the non-qualified fees. For more details, I’ve outlined the rates in my post on canadian payment processing .
4) EMV Chip and PCI Compliance; it is your responsibility to make sure that your terminal is EMV chip compliant. By July 2010, the liability shifts from the association to the merchant for fraudulent transactions. If you take a credit card with an EMV chip and process it on a terminal that isn’t chip compliant you are putting your business at risk.
PCI compliance defines how merchants store and process credit card information :
All merchants, whether small or large, need to be PCI compliant. The payment brands have collectively adopted PCI DSS as the requirement for organizations that process, store or transmit payment cardholder data. PCI SSC is responsible for managing the security standards while each individual payment brand is responsible for managing and enforcing compliance to these standards.
5) If It’s Too Good To Be True It Is!. All major Canadian credit card processors buy from the same source, Interchange. What that means is we all pay the same base rate for a domestic Visa and MasterCard transaction. We also pay the same Interchange adjustments for cards that don’t qualify. If a provider is offering 1.59% - which is under Interchange cost - they are making up the money back somewhere else. Make sure you read the contract and look for items like transaction fees, debit minimum, access fees etc.
