Top 3 Mistakes When Setting Up a New Merchant Account
Top 3 Mistakes Business Owners Make When Setting Up a New Merchant Account
Setting up a new merchant account/payment processing is crucial for any business that wants to accept credit card payments and or ACH. However, many business owners must correct mistakes during this process, leading to unexpected costs, disruptions, and frustrations. Understanding these common pitfalls can save you time, money, and headaches. Here are the top three mistakes business owners often make when setting up a new merchant account and how you can avoid them.
Mistake #1: Free is Not Free
One of the most common misconceptions is believing in the promise of “free” merchant accounts and free equipment ( There is NO Free Lunch). Many providers advertise free setups, which rarely means no costs are involved. These offers often have hidden fees buried in the fine print, such as higher transaction fees, monthly minimums, or annual charges.
How to Avoid: Always read the fine print. Understand all the costs associated with the account, including setup fees, transaction fees, monthly minimums, and any other charges. Also, be aware of the contract length and cancellation fees. It’s better to be fully informed upfront than to be surprised by unexpected costs later. When evaluating merchant account providers, transparency is critical. Ensure they provide a clear and detailed breakdown of all fees.
Mistake #2: Not Reading Terms of Service
With the convenience of services like Stripe, PayPal, Square, QuickBooks, and Shopify, many business owners rush through the sign-up process without thoroughly reading the terms of service. These companies often have extensive lists of prohibited/restricted business types. They might give you a quick way to start accepting payments, but they don’t only conduct thorough underwriting once you process transactions. This can lead to your account being frozen or closed and funds held if your business type falls into their restricted categories. In the worst-case scenario, you could be put on the Match List or TMF list and cannot obtain another merchant account.
How to Avoid: Before choosing a payment processor, thoroughly research their terms of service. Look up the company and its list of prohibited/restricted business types. Make sure your business type is supported. Understanding these terms upfront can prevent significant disruptions later. If you need clarification on any terms, consulting with a professional who can help you navigate these complexities might be beneficial.
Mistake #3: Misunderstanding Point of Sale Systems
Another common mistake is assuming out-of-the-box POS solutions from big brands like Toast, Square, and Clover are NOT customizable and can handle any inventory size or support a large-scale hospitality operation. While these systems are famous for their ease of use and DIY setup, businesses with specific needs or extensive inventories often need a more customizable solution. Also, you are expected to build it out yourself, mostly with little or no help from the company.
How to Avoid: Assess your business’s needs before choosing a POS system. If you have a large inventory of unique requirements, look for flexible and scalable solutions. At Nationwide Payment Systems, we offer various POS systems tailored to different types of businesses. Whether you need a system for a retail store with up to 20,000 plus items or a restaurant with a customizable menu, we have the right solution. If you have a chain or franchise, we also have scalable solutions.
How Nationwide Payment Systems Can Help
At Nationwide Payment Systems, we aim to provide our clients a different, more supportive experience. We believe in complete transparency and customer education, ensuring you understand all upfront costs.
Transparent Pricing: We explain all equipment and processing fees clearly and upfront. You’ll never be surprised by hidden costs; we provide a detailed monthly statement.
Comprehensive Support: Our onboarding and underwriting process might take a little longer, but this thoroughness ensures that your business is paired with a processor and bank that understands and supports your specific business type. This is crucial for long-term success and stability.
Custom Solutions: We offer a range of POS systems designed to meet diverse business needs. Our systems can handle unlimited inventory from small retail stores to large restaurants and bars. We also provide a concierge service to help build your menu, work with your IT team, and train your staff.
Specialized Experience: We have extensive experience working with startups and companies in emerging industries, handling everything from low-risk to high-risk businesses. Our tailored approach ensures that you get the best possible support and service. We offer gateways with RESTful APIs and more for more complex business types that need custom integration.
Setting up a new merchant account can be manageable. Avoiding these common mistakes can ensure a smoother and more efficient setup process. At Nationwide Payment Systems, we are committed to helping you every step of the way, providing transparent pricing, comprehensive support, and custom solutions to meet your business’s unique needs. Trust us to handle your payment processing so you can focus on what you do best—running your business.
