Despite the rise in alternative payment methods, credit and debit cards remain the most popular forms of payment among modern consumers.
Accepting card payments requires retailers to choose a payment processor to handle all of their credit and debit transactions.
When they do, that processor will present them with a payment processing agreement (sometimes called a payment services agreement).
What Is a Payment Processing Agreement?
Like any contract, the payment processing agreement defines the terms of the merchant and payment processor relationship.
This includes the rules and responsibilities of both parties, the process by which each transaction will be handled, an explanation of the fees and charges that may be applied, and the cancellation and renewal terms of the agreement.
For example, the payment processing agreement will likely include requirements regarding minimum transaction amounts, payment refund procedure, and applying sales tax.
In addition, it will require merchants to follow certain safety protocols to protect sensitive cardholder information, such as training employees to recognize fraud.
All of that sounds reasonable, right? Right.
The Problem: Not All Payment Processors Are on the Up and Up
Unfortunately, many payment processing agreements will also contain obscure provisions that can prove detrimental to your bottom line—especially should you decide you want to terminate the relationship at some point in the future.
Canada established the Code of Conduct for the Credit and Debit Card Industry to avoid such issues and promote transparency between merchants and payment processors.
However, like any aspect of doing business, disputes will happen.
Among the most common complaints from merchants are hidden fees (or fees that go up with no warning) and finding out their agreements include a locked contract term they didn’t know about.
The Solution: Do Your Homework
Because the majority of payment processing agreements leave little room for negotiation, merchants should take the time to do their research.
First things first, become familiar with the Code of Conduct so you understand your rights as a merchant.
Next, make sure you read through the entire payment processing agreement and pay close attention to the terms.
After all, you wouldn’t buy a house without reading all of the fine print; why should this be any different?
It may require a little extra time on your part, but remember your payment processor handles all of your credit and debit card revenue—as well as your customers’ personal information.
Making sure you understand every detail of your payment processing agreement is just smart business sense.
Don’t want to go it alone? Call MyWatchmen.
Whether you’re choosing a payment processor for the first time or renegotiating your current agreement, it helps to have a professional on your side.
Making quick decisions and rushing through the details can end up costing you money in the long run—or putting your business in a position of risk when it comes to security.
The experts at MyWatchmen know the payments landscape inside and out—including many of the top industry providers and their terms.
Let us negotiate on your behalf so you can rest assured knowing your payment processor is the best fit for your business.
Call MyWatchmen today at 1-888-256-2845 or schedule a time to meet with us.