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8 Sure Signs it’s Time to Switch Processors

8 Sure Signs it's Time to Switch Processors

Tired of dealing with payment processors that are holding your business back? Maybe it’s the constant battle with slow transaction times or high fees. Maybe it’s the fact that any time you call Merchant Support, Customer Care, or even the rep that sold you on a system, you get dropped into a voicemail void. Let’s not even start with the ring-around chatbot sessions!

If so, it’s time to take action! Choosing a trustworthy processor could mean the difference between smashing your goals and face-planting. That’s why we’ve compiled a list of eight telltale signs that it’s time to make the switch. From outdated technology to shady business practices, we’ve got you covered. Don’t let your payment processor hold you back any longer. Keep reading to find out the red flags to look for and move on to a better solution.

1. High or Confusing Fees

Hidden Junk Fee Listed In Bank Statement

Paying high or confusing fees with your payment processor can be frustrating and can cost your business. It’s important to understand what these fees and charges from your payment processor mean; they should be clearly stated, reasonable, and transparent. If you notice sudden rate increases, are unsure of where the fees are coming from, or in this example, the fee description is completely nonsensical, it may be time to consider switching to a different payment processor.

A reliable payment processor should provide clear and concise information about their fees and charges, making it easy for you to understand and manage your costs. Choosing a payment processor that offers fair and transparent pricing can avoid unexpected fees and save your business money in the long run.

If you notice sudden rate increases, are unsure of where the fees are coming from, or in this example, the fee description is completely nonsensical, it may be time to consider switching to a different payment processor.

2. Poor Customer Service

One-star customer service from your payment processor can be a frustrating experience for any business owner. When encountering issues with your payment processing, you need fast and efficient support to resolve problems quickly, right?

For example, when you call, text, or chat with Merchant Services, the last thing you want to deal with is an automated answering service or bot with long wait times. If you find yourself unable to get through to a real person on the other side of the screen, it is time to consider switching. In addition to the traditional ways of getting ahold of customer service, consider a processor that also offers virtual support through screen-sharing apps like Google Meet or Zoom if needed. By choosing a payment processor that offers reliable and accessible customer support, you can avoid the stress of poor service and focus on running your business effectively.

3. Expensive Equipment Leases

When it comes to payment processing, you need the right equipment to place orders, print receipts, and accept payment. These are all critical components to your business, and a good processor should offer options to help you get the equipment you need or allow you to use your own hardware when possible. Many payment processors offer equipment leasing as a way for businesses to access the necessary tools without incurring the high upfront costs of purchasing the equipment outright. They may even send a guide or tutorial videos on the installation or, even better, provide the installation themselves.

However, if you are questioning the cost-benefit of that equipment fee on your monthly statement, it may be time to consider another processor. Leasing equipment may seem like a good idea initially, but it can end up costing more in the long run. Expensive equipment leases from your payment processor can add up quickly, incurring hundreds to thousands of dollars in equipment fees over time. If your processor isn’t able to offer alternatives or even an explanation for the high costs of your equipment lease, that is another red flag. It’s often more cost-effective to use your own, rent, or buy your equipment instead of leasing it, especially if you plan on using it long-term. By carefully considering your options and doing your research, you can save money and avoid the pitfalls of costly equipment leases from your payment processor.

4. Business Growth

As a small business owner, ensuring that your current payment processing can keep up with your growth is vital. As your business expands, you need a payment processor that can efficiently handle an increased volume of transactions and be at the ready when you need an equipment swap, such as moving from a terminal to a full point of sale. As your business grows, you may be eligible for more favorable and competitive rates and fees from your payment processor, which can help you save money in the long run. By regularly evaluating your payment processing needs and working with a processor that can scale your business, you can ensure that you’re equipped to handle the demands of growth effectively.

5. Auto-Renewal Contracts

Auto-renewal contracts can be a sneaky trap for business owners. It’s essential to know when your contract is up for renewal and ensure you can opt. out. Some processors automatically renew contracts without informing you or with the renewal date hidden in the terms and conditions of your contract. In most instances, busy merchants have just a sliver of time to cancel and often miss the opportunity. This can result in unexpected penalties and expenses for your business if you attempt to leave (more on that on red flag #6).

By staying on top of your contract renewals, you can avoid these pitfalls and ensure you get the best rates and terms possible. Additionally, reviewing your contract periodically and considering switching processors if you find a better deal elsewhere is always a good idea. By being vigilant and proactive, you can ensure that your payment processing is serving your business’s best interests.

6. Early Termination Fees

Early termination fees or penalties can be a costly and frustrating experience for business owners who want to switch payment processors. Some processors charge a penalty fee if you leave before your contract ends, also known as “liquidated damages.” Early termination fees are anywhere from $295 to $895. If there is a liquidated damages clause, this can be much more.

Although damage liquidation clauses can be valid in certain cases, such as processing for a high-profile account that is terminated. In this situation, processing companies might have to recover the costs of resources needed for managing high-volume processing. Unfortunately, some processors resort to this tactic in combination with poor merchant services to make terminating a contract even more challenging.

It’s essential to be cautious of these clauses and fully understand the terms and conditions before signing a contract. Be sure to ask about any penalties for terminating the contract early, get clarification if you don’t fully understand the legal jargon, and always ask for the term limits and when your contract is set to auto-renew. Knowledge is key!

If you’re uncomfortable with the terms, it’s best to consider other options or renegotiate before signing. A good payment processor will have no problem explaining the contract and answering all your questions.

Blog Post Payment Processors Copy
Processors,Fees,Point Of Sale

7. Limited Hardware Options

When it comes to payment processing, having limited hardware options can be a significant challenge for businesses. It’s important to choose a payment processor that has experience with various processing systems, from different types of terminals to a full point-of-sale (POS) customized to your business needs. The ultimate goal of a processor should be to improve the user experience, and that starts with having the right equipment for your business. By working with a processor that offers a wide range of hardware options, you can ensure that your payment processing is tailored to your specific needs and preferences. Moreover, having access to the latest technology and equipment can help you improve your efficiency and accuracy. The ultimate goal of a processor should be to improve the user experience.

8. No Support for Small Businesses

Small businesses are the backbone of the economy and need support to succeed. As a small business owner, it’s essential to work with a payment processor that believes in your vision and is committed to helping you achieve your goals. Whether you need access to competitive rates, personalized customer service, or customized payment solutions, your processor should be your trusted partner in growing your business. By working with a payment processor that supports small businesses, you can have peace of mind knowing that you’re in good hands and have the resources you need to succeed. We believe in supporting small business owners with a passion for their craft. Your payment processor should also believe in you and your business goals. Together, we can help small businesses thrive and create a stronger, more vibrant economy.

Check out our recent article to find out which payment processing method is right for your small business in “Surcharge, Cash Discount, Dual Pricing, Oh My!

It’s a Wrap

Your payment processor is a critical partner in the success of your business. If you’re experiencing any of the eight signs discussed above, start researching your options. Don’t be afraid to request a demo, ask questions, email your current bank statement, and more. Whether you’re paying high or confusing fees, experiencing poor customer service, or facing limited hardware options, there are many reasons why you might want to explore new payment processing options. By evaluating your current processor and exploring other options, you can find a partner that meets your needs and helps your business thrive! Remember, the RIGHT processor should support small businesses, offer competitive rates and fees, and provide personalized service. You can achieve your business goals with the right payment processor just a tap away.

Unsure if you’re paying hidden fees? Get a free assessment today from our KokuaPay Merchant Services Team. We got you.

Desi Rose

KokuaPay Operations Manager and fintech writer.


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