Your business is looking to save money on credit card processing fees and you think you have found a better option. So you decide to make the change. After 12 years in the payments industry, I am going to provide you with a quick checklist that will alleviate future frustrations. We’ve seen too many business owners fail to do the necessary due diligence of checking on their current situation before making the jump to a new processor. Skipping such fact finding often times leads to additional costs and fees from leaving a merchant account open to being charged a termination fee.
1. Find out if your Merchant Account has a penalty to cancel
Each merchant services provider has a unique agreement when you sign on to use their services. Many of these agreements are quite lengthy and if you are like many of us out there, you may have not read ALL of the fine print when you signed up for your merchant account.
Even if you think your merchant account does not have a penalty to cancel, double check.
What if the sales representative told you there was no penalty to cancel when you signed up? You should still confirm with the merchant services provider that this is the case.
Some merchant services providers can charge a hefty fee to terminate the services early. Other credit card processors and ISO’s agreements state that if you don’t notify them in writing within 60-90 days of the anniversary date of when you signed, your merchant services contract renews.
When you contact your merchant services provider to confirm the details of your agreement, have them send you the information in writing. The merchant services provider can also provide you with a copy of the signed merchant application if you so desire. Notate who you spoke with and any other important details of your call.
2. Determine who owns the Credit Card Terminal or POS System you process through
Do you own your credit card terminal or POS system?
You might not own it outright. Some businesses are set up through a lease, rental, or the processing equipment is provided for free as long as you process credit cards through that particular company. Contacting your existing merchant services provider is the easiest way to know for sure. Again, quick due diligence can only make your life better down the road.
3. Verify payment processing software integration
This is only applicable if your business processes payments through an integrated software. Your software may only integrate with certain credit card processors. Contact your software company to determine if they will allow the potential new merchant account provider to integrate within their systems.
4. Confirm your Gift or Loyalty Cards can still work
Many businesses use gift and loyalty cards to increase customer spending at their businesses. If you set your gift or loyalty program through your merchant services provider, there is a chance that the cards may no longer work if you changes credit card processors. Find out from the new merchant services provider you are looking to switch to, if the gift and loyalty cards will be able to seamlessly transfer over to them. Even if they are able to be converted, there might be a cost. Confirm if there is a gift card conversion cost.
5. Handle the Cancellation of your Merchant Account Yourself
Once you have decided to move on from your previous credit card processor, you need to contact your previous processing company yourself.
It is rather simple, just call them and go over the cancellation procedures. These are pretty standard and include either sending an email or fax with your merchant account information to them addressing your wishes to cancel your account.
If you don’t contact your previous credit card processor, you are more than likely going to continue receiving monthly fees even if you don’t process credit cards with them.
Also, get it in writing (email or fax) that your merchant account has been cancelled or is scheduled to be cancelled.