Choosing a payment processor

With so many different services, terms, and fees, choosing the right processor for your business can be overwhelming. Making it worse, some sales representatives can try to push companies on you by offering cheap processing rates for a limited time. So how do you decide? What should you look for in a processing contract? 

Don’t get pulled in by offers of cheap processing rates. There are many other fees associated with a payment processing contract, and they should all be taken into consideration when deciding which payment processor to use.

What you should know before choosing a payment processor 

Review the processing contract before you sign. You should look at the Total Cost of Acceptance – this is generally found in Schedule A of the contract. Here, you will find:

• The terms of the contract

• The duration of the contract

• A penalty clause if you decide to end the contract early (for any reason)

• Whether the fees and rates are locked in for the term of the contract

Other considerations:

• Will someone from the company install the equipment?

• Who will service the contract, and what track record do they have? Some companies promise excellent service but are not equipped to deliver. A quick Google search for reviews of the company can help inform your decision.

• What card brands are supported?

• Can the point-of-sale machine be integrated with your register?

• Does the company offer e-commerce solutions?

• Is there a holding time before monies will be deposited in your account?

Remember: don’t sign anything until you know the answers and feel comfortable signing your name. When in doubt, call CFIB’s Business Advisors.

Independent Sales Organizations (ISOs) aka “Resellers”

One of the most common calls we get from business owners is regarding Independent Sales Organizations, or ISOs. These are companies hired by merchant services providers to sell their product. They do not actually provide the service or the terminals; rather, they are hired headhunters. You can tell they are an ISO because they will say/do anything to get you into a contract, and they are usually persistent and high-pressure. Lines they typically use include, "We are a company working for the banks to see that you receive your 30% discount on credit card fees", or "We are working on behalf of the banks/CFIB/Chase/VISA/MasterCard to lower your credit card fees. If you send us your statements, we'll find savings".

Here are some tips to deal with these companies:

• Don't provide your statements. Those are confidential documents.  If their rates are so good, they shouldn’t need to see what you are currently paying.

• Watch closely for hidden fees and exit penalties. You want to understand the total cost of the contract. Ask to view a copy of the contract and a completed ‘Schedule A' - this will show all the fees you will have to pay. Do not sign anything until you are satisfied with the fees you will pay.

• Check for rate increases hidden in the fine print. Under the Code of Conduct for the Payment Card Industry in Canada, you may have the right to cancel without penalty when certain fees or rates are increased, or new fees are introduced after you’ve signed. It’s important to understand what changes are permitted by the contract you’re agreeing to. You should also ask whether they (and their upstream network/partners) are subject to the Code and how they comply with it. If you feel a company is harassing you, and your “no” is not being respected, document the calls and/or emails and complain to the company in writing. If the issue isn’t resolved, you can also consult the Financial Consumer Agency of Canada for information on complaint options and escalation under the Code.

CFIB members can access preferred processing rates through our Savings Program Partner, Chase. 

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