By Emma Vassar -- Your online business Imagerises and falls on smart decisions. If you invest your time and money in a marketing strategy that doesn’t produce results, you’ll be out of business in no time. If you spend more than you need to on content creation or web design, you’re likely to grow at a much slower pace than you desire. Even your choice of credit card processor can have significant implications.

Here are some of the big mistakes online retailers make when they’re choosing a credit card processing company, and how to avoid them:

Not shopping around for quotes

Different credit card processing companies have different criteria for how they figure your rates and fees. For example, the length of time you’ve been in business, your credit rating, and the average dollar amount of each sale will figure into the equation. Get quotes from several companies – 4 or 5 are good to start – so that you know what range you’re working with.

Not understanding the fee structure

While there are certain restrictions on how credit card processing companies can structure your fees, you do need to be fully aware of their policies. Some online retailers choose a credit card processing company by looking at the average rate, not realizing that the actual rate they’re charged might vary greatly based on number of transactions per month, or the size of the average transaction. Make sure to get a full rate and fee listing before you pick your processing company.

Not verifying gateway compatibility

Most of the credit card processing companies do a decent job interfacing with shopping cart software. That being said, not every processing company will work with every cart software option. Verify compatibility with the vendor, and consider doing some research on your own to see what kinds of issues other clients have faced trying to use the gateway with your particular software. Identify whether you’ll need a third party piece of software to make the whole thing work.

Leasing equipment

If you expect to be in business for more than six months, you need to buy any relevant or necessary equipment. With strictly online retailers this isn’t usually an issue; you can usually get by without any equipment at all. However, if you intend to do any phone or offline sales and need to have equipment, make sure to make the investment rather than paying thousands extra over time for the lease.

Not knowing the cancellation policy

Some companies can charge you a significant fee for cancelling your contract. Verify the amount of the cancellation fee, and check the length of the contract. You want the flexibility to switch to another credit card processing company if you wish, without being severely penalized.

Choosing the right credit card processing company doesn’t have to be an arduous process. Armed with a little bit of knowledge, you can ask the right questions and make sure the processor you’re choosing is the right one for your online business.

About the Author: Emma Vasar is a finance writer whose interests and passion for helping others have led her to become an expert in small business. Get more tips and advice on her merchant account blog! 

Image: Garry L. /Shutterstock

 

 

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