Long-term credit card processing contracts are generally only good for the merchant services provider offering them. There are many reasons you should avoid getting locked into one of these longer-term contracts whenever possible. The better you understand the reasons for avoiding them, the more diligent you can be in seeking alternatives as you shop around to compare prices, contracts, and services available to you.
You May Get Locked into Higher Rates
The rates and fees your credit card processing provider charges can bite into your profits really fast if you aren’t careful. Instead of getting locked into a long-term contract, lasting up to five years or longer, seek shorter contracts or month-to-month termsthat allow you greater leverage when it comes to negotiating better fees for your business.
No Incentive to Provide Stellar Customer Service
Another downside with any long-term contract, not just those related to credit card processing, is that providers who have long-term contracts with you have no incentive to wow you with their customer service and support. It could leave you without the required assistance at a critical time for your business.
They know that because you’ve signed a contract and face substantial fees for dropping their services that you’re likely to stick with them. No matter how poor the quality of customer service they offer happens to be.
No Room to Grow
A common problem retailers and other merchants experience with long-term payment processing contracts is that they leave little wiggle room for growth. You need short term contracts that either allow you to scale your services to meet the growing needs of your company or that allow you to take your business elsewhere when you’ve outgrown the level of service they can provide.
Scalability is more important than you might realize, especially if you’re negotiating your first credit card processing contract. This is what allows you to do any and/or all of the following:
- Process higher numbers of credit card transactions during busy seasons
- Have fairly assessed fees for each of the transactions your business completes
- Accommodate higher dollar amounts for sales
Your goal is to choose a credit card processing company that celebrates the growth of your business rather than punishing you for it with excess fees for your expanding needs.
Give Yourself an Easy Out
The problem with long-term contracts is that they rarely offer an “easy out.” In fact, many of them charge you exorbitant fees for attempting to get out of the contract early. Shorter contracts, especially those that operate on a month-to-month basis, provide you with an easy out if you decide to switch providers because their service isn’t working for you, decide someone else offers something that more closely matches your needs, you’re looking for ways to save money, or you simply want better customer service.
In fact, if you have a short term contract, it doesn’t matter why you want to leave. It’s your choice to do so—on your terms.
The bottom line is that it’s in the best interests of your business to look for a payment processing partner that offers short term contracts. Month-to-month contracts are even better as they provide you with the greatest possible flexibility and negotiating power when it comes to securing more favorable terms for future months.
Contact BankCard Services today to learn more about our month-to-month merchant services, including credit card payment processing. We believe in offering transparent billing practices and focusing on you. Working with us will be different than what you can expect from other credit card processors. Call us today and experience that difference for yourself.