We earn a commission from brands listed on this site. This influences the order and manner in which these listings are presented.
Advertising Disclosure

3 Common Oversights People Make When Choosing a Credit Card Processor

Top10.com Staff
Choosing a credit card processor
Some decisions in life just don’t make a practical difference. White or pink toilet paper? Doesn’t matter. No.2 or No. 3 pencil? Doesn’t matter. But a problem arises when we treat choices that do matter like those that don’t.

Decisions, decisions, decisions...

Choosing a credit card processor, or a CCP, is a decision that does matter and can make a tremendous difference in your day-to-day life. By choosing one CCP over another, your business monthly profit might change by thousands of dollars.

The problem is that the details and deals surrounding credit card processors are notoriously - and often needlessly - complex.

Faced with so many considerations, many people focus only on the headline rates being advertised. They don’t take the time to figure out whether those rates will actually apply to them and they don’t take into account other vital considerations that could hamstring their growth or cost them a fortune down the road.

Here are three of the most frequent oversights that people make when selecting a credit card processor.

Mistake #1: You Don't Completely Understand The Pricing 

“Ooh, a super low rate of 1.59%? Sign me up! But wait… why have I been charged so much more on all my transactions? This is not the price I was quoted!”

That is possibly the single most frustrating moment after choosing a credit card processor, especially among small/mid-sized businesses and startups.

In the US, the trouble is often that the processing agreement comes with a hefty volume commitment, meaning you have to make a certain number of sales using the payment processor. If you fall short, the low rate is scrapped and you end up paying a much higher fee on every transaction.

But that’s not the only thing that affects the rate you pay. There are so manyconfusing terms in the merchant industry and an unethical salesperson can easily use this to their advantage, misleading you into signing up for something that ends up costing you much more than you expected.

One major problem is that it does actually cost the payment processor a different amount to handle transactions from different types of cards. The amount charged by the card company, Visa or MasterCard for example, is called the interchange rate, and it will differ between debit, credit, airmiles, and other sorts of cards. Your payment processor can’t control that and they will usually pass these costs on to you. Few offer flat pricing.

Salespeople sometimes turn these fluctuations into a sneaky pricing trick to hook you into a bad contract. This means they quote you an extremely low rate that is actually based on using one particular type of card in one particular type of situation.

For example, they could quote you an ecommerce transaction fee that sounds great until you realize that this only applies to swiped card transactions. Obviously it’s impossible to swipe a card in an ecommerce transaction – it’s just a trick to lure you into a bad deal without lying directly to your face.

Mistake #2: You Haven’t Read the T&Cs Full

It’s not just pricing rules that can get buried in the paperwork. Many people also wind up getting stung with huge penalties for trying to part ways with a payment processor that isn’t working out for them, only to find that they’re locked in long term.

Typically, contract lengths are anywhere between 1 and 5 years, with big cancellation fees if you try to get out of them early. Make sure you know what you’re getting yourself into, and for how long!

And remember, there may be any number of other hidden fees, charges and rules buried in your contract. There may be fees for chargebacks and failed transactions. There may be maximum transaction limits, as well as minimums. There may be very different pricing for different types of payments that aren’t popular yet but may be popular in a year or two.

Don’t just skim and sign – take the contract seriously.

Mistake #3: You’re Not Worried Enough About Security

Never downplay the power of fraudsters, hackers and data thieves. They are a very serious concern. It’s almost daily that we hear about major cyberattacks and data breaches. If you don’t take security seriously, the fraudsters will know.

Instead, you want to find a payment processor who has security covered. Are all transactions fully encrypted? How and where do they store customer data? Are they fully PCI compliant? Is fraud protection a key selling-point of theirs? You need to work with a company you can really trust. The security of your business and your customers’ most sensitive data are in their hands.


We know that there was once a time that you would’ve never believed someone who told you that you’d own your own business one day, but here you are. Now picture the same scenario with your CCP. We are telling you that while you may not care so much about these 3 issues right now, if you don’t do your homework you may regret it in the end.

Top10.com Staff
Top10.com's editorial staff is a professional team of editors and writers with dozens of years of experience covering consumer, financial and business products and services.