Guest blog: How to switch merchant service provider
Libby James, co-founder of Merchant Advice Service, reveals the common mistakes salon owners make when choosing a payment provider and how to make the move to a new provider with ease.
Merchant account providers give salons the ability to accept debit and credit cards in payment for goods and services.
Switching merchant accounts can prove extremely profitable for busy salons, with savings of merchant costs ranging between 20% to 40%.
However, owners and managers often wonder whether it’s worth the effort trying to change providers and worry about gaps in service, which could have a knock-on effect on their bottom line and could even stop customers visiting in future.
That’s exactly why I’ve put together a guide to make the process as straightforward as possible, enabling profit margins to increase and business to prosper.
5 tips for switching merchant provider with ease:
1. Understand your current contract
Know your current contract, the length remaining and what costs (if any) there may be if you were to switch.
Make sure you don’t break a contract or give your current provider the notice they require to prevent any unexpected fines.
2. Do your research and shop around
Establish what you are paying currently, your average transactions amount and monthly card turnover. This can all be found on your transaction statement and will give you all the knowledge you need to compare providers.
Don’t just consider larger, well-known merchant account providers – some of the smaller companies offer better deals and are more prepared to negotiate on costs.
3. Hidden costs
One of the biggest mistakes businesses make when choosing a merchant service provider is to just compare rates rather than other fees associated with a merchant account.
Examine every cost involved, such as authorisations fees, chargebacks and PCI. Do not be caught out by hidden costs.
4. Choose a provider that works for your business
Beware that costs for different types of transactions may vary. For example, if you take payments over the phone, these are often higher.
It’s a factor worth bearing in mind if you sell gift vouchers or take deposits for larger bookings and treatments.
5. Avoid gaps in service
Ensure that there will be no gaps in service between the two providers. Make sure your new provider knows when your existing contract ends.
Communication is key here. If you are keeping your existing PDQ machine, make sure your new provider can work with it, reducing risk of gaps in service.
And don’t forget…keeping these five tips in mind should make choosing a new provider a simple and profitable process.
However, if you’re still a little puzzled about the best merchant service provider for your salon, contact an independent advisory service that can recommend the best solution for your business.
Libby James is co-founder of Merchant Advice Service, an independent advisory and brokerage service for all things related to card payments.