Merchant services have been instrumental in transforming small businesses by facilitating seamless financial transactions. These services, provided by merchant service providers, enable businesses to handle credit card, debit card, and other electronic payment transactions. While there are a plethora of options available in the market, choosing the right merchant services provider for your small business can be a daunting task. This article aims to demystify this complex process by presenting six essential questions to ask your potential service provider.

• What is the Fee Structure and Are There Any Hidden Costs?

  The cost of services is often at the forefront of any business decision, and rightly so. Ask your service provider about the pricing model they apply. The most common models are the interchange-plus pricing and the tiered pricing. The interchange-plus model is lauded for its transparency as it involves a set markup over interchange costs (the costs set by credit card companies). The tiered model, however, groups transactions into different tiers based on their perceived risk, which can create ambiguity over costs.

  Moreover, understanding the complete pricing structure is crucial. Ask about monthly fees, statement fees, minimum processing fees, and contract cancellation fees (if any). All these add up to the total cost of services and hence, must be considered before signing up.

• What is the Scope of Customer Support?

  Customer support is invaluable in resolving technical issues and ensuring business continuity. The scope of customer support can range widely among service providers. Some might offer 24/7 assistance, others might have limited hours, some might provide in-person onboarding and training while others might rely on online resources. Understand this scope and evaluate it based on your business needs.

• What Are the Processing Times for Transactions?

  The speed of transaction processing can impact your business cash flow. Ask your service provider about the time it takes for funds to land in your business bank account once a transaction is made. Typically, it takes 1-2 business days but this can vary among service providers.

• How Secure are the Payment Processes?

  Data breaches pose a grave risk in today's digital landscape and can have detrimental effects on your business. Therefore, it's important to inquire about the security measures that the service provider has in place to protect your clients' financial data. Look for providers that comply with the Payment Card Industry Data Security Standard (PCI DSS), use encryption, tokenization, and offer fraud prevention tools.

• What is the Quality of the Point of Sale (POS) System?

  The POS system is where the customer makes the payment for goods or services. Check the functionalities of the POS system offered by your service provider. Can it integrate with your current systems? Does it support all modes of payment? Is it mobile-friendly? These are the kind of questions you need to ask.

• Is There Room for Growth and Future Proofing?

  Finally, a merchant services provider should be able to grow with your business. If you plan to expand, whether by opening more locations or offering online sales, your provider should be equipped to handle these changes. Ask about their capacity and readiness to adapt to future technological advancements as well.

These questions, although not exhaustive, serve as a good starting point to help you navigate the vast ocean of merchant services. While the process might seem intimidating, remember that the end goal is to find a provider that meets your business' unique needs and aids in its growth. As Mark Twain once said, “The secret of getting ahead is getting started”. So, start asking these questions and pave the way for your small business to thrive in the modern market.