A month or so ago, I wrote a blog about accepting credit and debit cards for payments at BHPH dealerships. The response to that blog has been overwhelming. I am grateful for the comments, calls and emails I have received. The questions I have been asked have been very good ones and, since I’m sure there are other readers who share those questions, I have decided to respond to them here. The questions and/or comments fell into two separate categories; those who did not currently accept cards for payment with some of their reasons why and those who do accept credit or debit cards but are unhappy with their current situation. Here are the top 4 concerns in each area.
Don’t currently accept cards
All the hassle with fraudulent credit card transactions makes a merchant account not worth it.
With some processors this may be true. As you select a processor this is one of the areas you will want to pay attention to. The processor we selected, PayPros, offers a service known as Fraud Watch. FraudWatch provides for customer education, risk monitoring and business fraud assistance. They aggressively try to eliminate any fraud, reducing chargebacks. They have saved customers over $19 million in losses in the past four years and their chargeback rate is one of the lowest in the industry.
I’m worried about all the about credit card data breaches and how it could affect my business.
It is a fact that credit card breaches are a growing issue and you are right in being worried about them. One key factor in our choosing PayPros as our partner is in the fact that our integrated solution with them utilizes the most secure technology available in the industry today- encryption and tokenization. Credit card information is encrypted at the point of swipe and is never, ever in the clear.
PayPros backs up their secure processing technology with a $200K merchant breach guarantee ($150K with PayPros and $50 with Trustwave). These monies would apply to any forensic costs, fines or card replacement fees you incur.
Long contracts and termination fees hidden in contracts lock me in for too long.
Not all processors require their customers to sign contracts and some that do may not have expensive termination fees. Again, this is one of the topics you need to research during your search for a merchant services provider. One of the reasons we selected PayPros to partner with is there is not a contract with an early cancellation fee. With PayPros it is a month to month contract that you can cancel your contract with them at any time without penalty.
My customers don’t have credit cards.
That has been the attitude in the Buy Here – Pay Here and Lease Here – Pay Here businesses for many years. However, with the increased issuance of debit cards, it’s just not true anymore. 75% of working Americans have access to a debit or credit card. Admittedly, that percentage may be lower than that in the BHPH & LHPH marketplace but we have a solution for that as well.
As part of our PaySystem+ product within our BHPH & LHPH software, Management System Plus, you can get your customers a payroll–loaded debit card they can then use to make their car payments. This card is a product of SurePay, LLC and is the only debit card designed specifically for the payment collection industry.
Currently Accepting Cards
My rates and fees are too high.
Rates and fees can vary greatly among the various card processors. In determining the processor you want to work with, this is one of the main areas you need to study. When we were looking for a processor to partner with, we were able to utilize our buying power (clout) as a company to negotiate rates for our merchants- collectively the Constellation merchants have a lot of “buying” power. Our partner, PayPros, has guaranteed us that it will never cost you more to work with them than you currently pay in rates and fees and they back that up with a $50 VISA gift card if they can’t meet or beat your rates. That guarantee is a perpetual guarantee- if you ever get a written quote for a lower rate all you have to do is fax it to PayPros and they will do a rate review to match it or let you leave them without penalty.
I can’t understand the rates and fees I am being charged.
Our chosen processor, PayPros, has a whole team of pricing experts that will do a financial analysis for you- to show you what you currently are paying and to show you what you will be paying by working with them. PayPros works with our clients so they understand those rates- they want them to make an “educated” decision. Make sure any processor you choose can provide the same level of rate clarity and that they have a customer support organization that will walk you through your statements so you understand clearly what the fees are.
Contracts are written to protect the bank’s business, not mine.
Banks always write their contracts to benefit themselves and guarantee that they’ll get paid. Banks have contracts that contain cross collateralization clauses- meaning they can deduct funds across your accounts to satisfy payments in another account. This is the primary reason we recommend that whatever you do, don’t put your merchant account with your bank (where you may have your checking accounts, savings accounts, mortgage, etc). Make sure you select a processor whose contract is understandable and doesn’t penalize you. PayPros contract is such that you can cancel at any time without penalty- this keeps them on the hook to ensure that you are satisfied with your rates and fees and more importantly- the service and support you get with your account. A PayPros merchant services agreement utilizes best practices in the processing industry to provide you with an agreement that protects you as well- clearly stating how fees are assessed and cancellation/termination policies
My credit card processing is through my bank and tied in with all my other business at the bank.
Your bank is not really the processor of your payments- they are more than likely an agent. This can cost you more money in higher fees because the bank is really just a middle man. Banks also have contracts that contain cross collateralization clauses- meaning they can deduct funds across your accounts to satisfy payments in another account. This is the primary reason we recommend that whatever you do, don’t put your merchant account with your bank (where you may have your checking accounts, savings accounts, mortgage, etc). Your bank also has banking hours- including their support organizations – making it difficult to get answers when you need them. They may even outsource their support overseas to a totally different company.
We selected to partner with PayPros to provide merchant services for our clients to overcome these issues. PayPros is the processor, enabling them to guarantee you the lowest rates available. The PayPros support team is based in Northern California and the support personnel are PayPros employees and they are available 24 hours a day, 7 days a week, 365 days a year. Another advantage of using the processor we selected is that the bank doesn’t understand the Constellation Software- PayPros does and has visibility into the entire end to end payment process. The bank can’t provide support for the end to end processes- which opens the opportunity for finger pointing. Our relationship with PayPros is based on referrals- they provide the best support and customer experience because if they didn’t, we wouldn’t continue to refer business to them.
Selecting a processor for your credit and debit card transactions can be a difficult decision. It takes a great deal of research to determine that you have found the best provider at the lowest possible cost. We’ve tried to do that for our clients. We selected PayPros out of dozens of companies that we looked at. They are leaders and innovators in their field and have a real understanding of the BHPH and LHPH business. We recommend that you carefully research who you want to be your provider and we heartily recommend you consider our partner, PayPros.
