4 Key’s to Choosing a Merchant Service Provider
Finding the best Merchant Service Provider (MSP) can be overwhelming and costly if you're not aware of the potentially numerous charges levied on cafés and restaurants by card associations and merchant service providers. Merchant services enable cafés or restaurants to process credit card payments and deposit funds into their bank account.
The process to get a MSP can be a long and involved as there are thousands of options. The following are four key areas to consider when selecting an MSP.
1. Processing Rates
The processing rate is the percentage charged to the café or restaurant based upon the customers purchase. The rate can range anywhere from 1 to 5 percent or higher as re-sellers may also charge a fee on top of the processing charge. The actual rate can differ for each customer depending on their bank , the type of credit card and how the transaction is conducted. For example it’s possible for merchants to pay higher rate on a transaction if the customer has a Visa Signature Preferred card rather than a Traditional Rewards card. (Click to view Visa Interchange Rate )
2. Transaction Fees
In addition to the processing rate, a transaction fee may also be included. The transaction fee would be charged on each and every purchase. The amount ranges anywhere from $0.25 to $0.50 per transaction. Some providers even require a minimum monthly transaction fee. This fee can be very costly for merchants like cafés who have a low average check size but a high volume of transactions.
3. Pin Pad Cost
There is a cost to using a pin pad whether it’s renting, leasing or buying. If you decide to purchase, ask for details on the warranty period.
4. Batch Times
Batch times represent when bank deposits will be made into a merchants account. Times vary anywhere from two days to as long as two weeks. This information is critical to cash flow, especially if a restaurant is located on the West Coast and the merchant provider is on the East Coast where batch times may end at 12am (EST) and 9pm (PST).
There is no official ranking of an MSP so it’s a good idea to ask around and search online for reviews. The most important question to answer is how fees are structured. Vivonet works with a multitude of MSP’s and if you don’t have one, we can recommend one to fit your needs.
Vivonet is re-defining restaurant POS by combining cloud based technology with the Internet, mobile and social media. Learn how we can help your café or restaurant by contacting Sven Winter at firstname.lastname@example.org .