HOW TO CHOOSE A CREDIT CARD
PROCESSING COMPANY THAT FITS YOUR BUSINESS
by Elizabeth Poppen,
The Poppen Agency
Thepoppenagency@gmail.com
(469) 665-9334
There are over 1300 credit card processors and with
hyper-competition and extremely thin margins, companies find
new ways to deceive merchants, increase credit card merchant
fees, and make their Profit & Loss Statement increase to present
to stakeholders. Since there are endless agents and resellers it is
hard to make a clear decision on who you should partner with.
Here are a few recommendations I would suggest.
How to research a credit card processor
Beware of online searches since the majority of credit card
processing review sites are paid. Bloggers are paid to write a
great review about the credit card processing company, so their
bias is in the way. Some bloggers or affiliates add a link for you to
click and are paid based on your sign-up. Square, Stripe, and
PayPal are most common. These review sites don’t have the
reader's best interest in mind. They say the processor is the best
simply by who is paying the most.
Choosing the right payment processor is crucial for ensuring
smooth transactions and minimizing unnecessary costs. Here are
the key factors to consider:
1. Pricing Structure & Fees
● Look for transparent pricing—avoid processors with hidden
fees.
● Compare flat-rate vs. interchange-plus pricing to see
which suits your business model.
● Watch out for monthly minimums, PCI compliance fees,
and early termination fees.
2. Security & Fraud Protection
● Ensure the processor is PCI DSS compliant to protect
customer data.
● Look for encryption and tokenization to prevent fraud.
● Consider fraud detection tools like charge-back protection.
3. Payment Methods & Flexibility
● Choose a processor that supports credit/debit cards,
mobile wallets, and ACH payments.
● If you operate internationally, ensure multi-currency
support.
4. Integration & Compatibility
● Make sure it integrates with your POS system, accounting
software, and e-commerce platform.
● Check for API access if you need custom solutions.
5. Customer Support & Reliability
● Look for 24/7 customer support with real human
assistance.
● Ensure fast settlement times so funds reach your account
quickly.
6. Contract Terms & Scalability
● Avoid long-term contracts with high cancellation fees.
● Choose a processor that can scale with your business
growth
What are the common mistakes business owners make when
choosing a payment processor?
Many business owners unknowingly fall into traps when selecting
a payment processor. Like the Ad above.
Here are some common mistakes to
avoid:
1. Focusing Only on Low Rates
● Some processors advertise rock-bottom transaction fees
but hide extra charges like PCI compliance fees, batch
processing fees, and monthly minimums.
● Always check the full fee schedule before signing up.
2. Ignoring Contract Terms
● Long-term contracts with early termination fees can lock
you in.
● Look for month-to-month agreements with transparent
pricing.
3. Overlooking Hidden Fees
● Watch out for statement fees, settlement fees, and
charge-back fees that aren’t disclosed upfront.
● Ask for interchange-plus pricing for better transparency.
4. Choosing a Processor That Doesn’t Scale
● If your business grows, will the processor support higher
transaction volumes?
● Ensure they offer flexible solutions for future expansion.
5. Poor Customer Support
● Some processors have slow response times or only offer
email support. ● Look for 24/7 live support with real human assistance.
6. Not Checking Integration Compatibility
● Make sure the processor works with your POS system,
accounting software, and e-commerce platform.
● If you need custom solutions, check for API access.
What are the risks of choosing the wrong payment
processor? Choosing the wrong payment processor can lead to
financial losses, operational headaches, and security risks.
Here are some of the biggest pitfalls:
1. Hidden Fees & Overcharging
● Some processors bury extra fees in contracts, such as PCI
compliance fees, batch fees, and statement fees.
● Businesses often overpay by 20% or more due to opaque
pricing models.
2. Poor Customer Support
● If a processor lacks 24/7 support, you could be stuck with
transaction failures or charge-back disputes with no
immediate help.
● Slow response times can hurt cash flow and delay
payments.
3. Security Vulnerabilities
● Weak security measures can lead to data breaches,
exposing customer payment details.
● Some processors lack fraud prevention tools, increasing
the risk of charge-backs and unauthorized transactions.
4. Contract Lock-Ins & Termination Fees
● Long-term contracts with high cancellation fees can trap
businesses in bad agreements.
● Some processors charge penalties for switching providers,
making it costly to leave.
5. Limited Payment Options
● If a processor doesn’t support mobile payments, digital
wallets, or international transactions, businesses lose
customers.
● Lack of flexibility can hurt scalability as your business
grows.
How to choose the best equipment and technology
Many payment processors have locked their technology into the
equipment they provide so that you cannot switch to a different
company. You will want to figure out what and how your business
needs to accept credit card payments whether it be with a POS
system, a stand-alone terminal, or via the internet or over the
phone.
How to determine the best pricing to cover interchange fees
All credit card processing companies offer Interchange Plus
Pricing. Flat-rate pricing might seem better, but be sure to look at
the numbers based on your average ticket amount. Then there is
Dual Pricing.
So, let's break this all down.
What is interchange?
Interchange refers to the fees that payment networks (Visa,
Mastercard, etc.) charge businesses whenever a customer uses
a credit or debit card. These fees are set by the card networks
and are paid to the issuing bank (the bank that provided the
customer's card). Interchange rates vary based on factors like the
type of card used, the transaction method (in-person, online,
keyed-in), and the business category.
Here’s why interchange matters:
● It’s a significant cost for businesses – Every card
transaction incurs an interchange fee, which is why
understanding these costs is crucial for pricing your goods
and services.
● Rates aren’t negotiable – While interchange fees are
standardized by the card networks, payment processors
(merchant services providers) add their own markup, which
is negotiable.
● Different transactions, different rates – A rewards card
will have higher interchange fees than a basic debit card.
Similarly, card-present transactions (where the card is
physically used) are cheaper than card-not-present
transactions (online payments, manual entries).
● Payment processors pass these fees to you – Your
merchant services provider pays interchange fees to the
banks and then charges you based on the pricing model
they use.
Your goal as a business owner is to minimize unnecessary costs.
While you can’t control interchange fees, you can choose a
payment processor with fair pricing. It is very common to change processors at least once per year. Some providers offer
interchange-plus pricing, where you pay the interchange fee plus
a small markup (transparent and predictable), while others use
tiered or flat-rate pricing (which might be higher overall).
What you’re looking for is a payment processing solution that
keeps interchange fees reasonable and aligns with your goal of
optimizing business operations.
Interchange rates are updated biannually (typically in April and
October) by the card networks. You can find the latest rates from
sources that track them, such as:
● CreditDonkey – Lists interchange rates for Visa, Mastercard,
Discover, and American Express, along with strategies to
minimize costs.
*May 14,2025 Photo is an Example
Interchange-plus pricing is a transparent payment processing
model where you pay the actual interchange fee set by the card
networks plus a fixed markup from your payment processor.
How It Works:
● Interchange Fee (non-negotiable): This is the cost set by
Visa, Mastercard, etc., which goes to the issuing bank.
● Processor Markup (negotiable): Your payment provider
adds a small fixed percentage and/or transaction fee on top.
For example: If the interchange fee for a credit card transaction is
1.8% + $0.10, and your processor charges 0.3% + $0.10 as their
markup, your total fee would be: 2.1% + $0.20 per transaction.
Why Businesses Prefer Interchange-Plus:
✅ Transparency – You see exactly what portion goes to the
card networks and what your processor is charging.
✅ Fair Pricing – Instead of paying inflated flat rates, your costs
align with the real interchange fees.
✅ Scalability – As your business grows and processes more
transactions, interchange-plus pricing keeps fees predictable.
Which pricing is Right for Your Business?
Interchange-plus is ideal for businesses that process a high
volume of card transactions or want transparent pricing. Since
you’re focused on optimizing payment processing for home
service contractors and business owners, this model aligns well
with your mission—helping them avoid unnecessary costs and
scale efficiently.
Flat-rate pricing is a payment processing model where
businesses pay a single, fixed percentage for all transactions,
regardless of the card type or method used (in-person, online,
keyed-in). Instead of paying interchange fees plus a markup,
businesses are charged one predictable rate.
How Flat-Rate Pricing Works:
A processor might charge 2.9% + $0.30 per transaction, whether
the customer uses a debit card, a rewards credit card, or makes
an online purchase.
Pros of Flat-Rate Pricing:
✅ Simplicity – No need to track different interchange rates for
various card types.
✅ Predictability – Easy to budget for processing costs since the
rate stays consistent.
✅ Easy Setup – Often used by processors like Square, PayPal,
and Stripe, which require minimal paperwork.
Cons of Flat-Rate Pricing:
❌ Higher Fees for Some Transactions – Since processors
bundle interchange fees into the flat rate, you might pay more
than necessary for debit or standard credit card transactions.
❌ Less Control – You can’t take advantage of lower
interchange rates for certain cards (e.g., debit cards often have
lower fees in interchange-plus models).
Is It Right for Your Business?
Flat-rate pricing is best for small businesses, startups, and
low-volume merchants who value simplicity and predictable
costs over optimizing fees. Since you specialize in payment
processing solutions, your clients (home service contractors and
business owners) might benefit more from interchange-plus
pricing, which gives them greater control over costs as they
scale.
Dual pricing is a strategy where businesses offer two different
prices for goods or services—one for customers paying with cash
and another for those paying with a credit or debit card.
Essentially, the card price includes the processing fee, allowing
the business to avoid absorbing interchange costs.
How Dual Pricing Works:
● Cash Price – A lower price that doesn’t include processing
fees.
● Card Price – A slightly higher price that reflects the cost of
accepting cards.
For example, if you sell a service for $100:
● Cash Price: $100
● Card Price: $103 (covering a 3% processing fee)
Pros of Dual Pricing:
✅ Eliminates Processing Fees for Your Business –
Customers who pay with cards cover the transaction cost.
✅ Encourages Cash Payments – If your business prefers cash
flow, dual pricing can steer customers toward cash payments.
✅ Transparent Pricing – Customers see the difference upfront,
rather than hidden fees affecting your margins.
Cons of Dual Pricing:
❌ Customer Perception – Some consumers dislike paying
extra for card transactions.
❌ Compliance Considerations – Dual pricing must be properly
disclosed to avoid issues with card networks or regulations.
❌ Not Ideal for Online Transactions – Since most digital
purchases rely on card payments, this model works best for
in-person sales.
Is It Right for Your Business?
Dual pricing is best suited for businesses with high in-person
sales, such as home service contractors, retail shops, auto repair,
or restaurants. Since you work with contractors who handle
invoicing, offering dual pricing could help them offset processing
fees while maintaining competitive pricing for cash-paying clients.
I suggest having your agent use 2 - 3 statement analysis tools to
find the best. It’s free and can help you and your agent see the
best rates available for your business.
Spotting hidden junk fees in a payment processing statement
requires a keen eye for vague charges and unnecessary
add-ons. Here are some common ones to watch out for:
Hidden Fees to Look For
1. PCI Compliance Fees – Some processors charge
monthly or annual fees for PCI compliance, even if
you’re already compliant.
2. Statement Fees – A fee just for receiving a monthly
statement, whether digital or paper.
3. Monthly Minimum Fees – If your transactions don’t meet
a certain threshold, you might be charged a penalty.
4. Settlement Fees – Some processors charge extra for
settling transactions at the end of the day.
5. Authorization or Transaction Fees – These fees can be
hidden within your per-transaction costs.
6. Early Termination Fees – If you cancel your contract
early, you might face hefty penalties.
How to Identify & Avoid Them
● Review Your Statement Line by Line – Look for vague
descriptions like “miscellaneous fees” or “service
charges.”
● Compare Rates – If your processor’s fees seem higher
than industry standards, ask for a breakdown.
● Ask for Interchange-Plus Pricing – This pricing model
separates actual card network fees from processor
markups, making costs more transparent.
● Negotiate with Your Provider – Many fees are negotiable,
especially if you process high volumes.
● Consider Alternative Payment Solutions – Some
providers offer more transparent pricing models without
hidden fees.
How to decide if you should sign a contract
Contracts are no longer a must in credit card processing. You will
only need to sign a contract for the lease of your equipment.
Many payment processors will offer you a one to three-year
commitment, with an early termination fee. This is just no longer a
must. I would stay clear of these offers. Always review the term
clause in these agreements, because they can be incredibly
deceiving. You can obtain a month-to-month agreement with the
best pricing with most top companies. Beware of extra charges
like payment gateway fees, in addition to your monthly
subscription fees. And make sure you read the fine print.
How to decide
When you are deciding what is the best agent you should side
with who is interchangeable. All credit card processing companies
pitch the same types of credit card merchant fees, offer similar
products, and use the same smoke and mirror sales tactics. The
difference between credit card processing companies is ensuring
the technical capabilities that your business needs can be
accommodated appropriately by the credit card processor you
choose.
For example, if your business currently uses management
software, there may be certain credit card processing companies
that partner with that software, limiting your choices of which
company to use. If that is the case, ask them if the software is
agnostic.
Use an agent that looks at all the options. Leverage as many
resources as you can.
Elizabeth Poppen: Champion for Small Business Success
Elizabeth Poppen, a proud native Texan, has dedicated over 20
years to helping businesses thrive. With a passion for
empowering small business owners, she specializes in protecting
them from charge-backs, compliance issues, and excessive bank
network fees. Her expertise ensures that companies operate
efficiently while navigating the complexities of payment
processing. The technology she provides comes from the world's
leading providers, offering businesses top-tier solutions tailored
for growth.
Elizabeth has called Wise County home since 2016. Before
shifting her focus to business optimization, she shaped young
minds as a dedicated teacher in Eagle Mountain ISD, Lake Worth
ISD, and Fort Worth ISD. Her roots in education reflect her
commitment to helping others understand and leverage financial
systems for sustainable success.
Family is at the heart of Elizabeth’s journey. Her husband, Jason,
has lived in Wise County since 1997 and owns his own business,
embodying the entrepreneurial spirit they share. Their son,
Zachary, graduated from Decatur High in 2011 and now builds his
own family alongside Tiffany, whose Saginaw roots ground them
in Texas tradition. Together, they raise their two children, Braxton
and Serenity. Meanwhile, Elizabeth’s son, Michael, is carving his
career path in Cleveland, Ohio, pursuing his own ambitions.
Elizabeth’s deep appreciation for business stems from
generations of entrepreneurs. Her grandparents were business
owners in the Houston area, and her father’s family, originally
from Oklahoma, also planted roots in Houston. Perhaps
entrepreneurship runs in her blood—after all, history tells an
intriguing family tale: Billy the Kid, the legendary outlaw, was her
uncle four generations back.
Beyond her legacy, Elizabeth offers a vital service to business
owners—a free statement analysis that uncovers hidden bank
network fees, compliance risks, and charge-back vulnerabilities.
With her keen eye for financial optimization and unwavering
dedication to transparency, she continues to equip businesses
with the tools they need to scale confidently. She is a great resource for building a system within your business and keeping the motivation you need to execute.
Some of the programs available:
- Cash Discounting program
- Online ordering with delivery options
- Website creation with product distribution
- App creation
- Giving by text
- Sermons online
- Charge-back protection
- Free equipment for qualifying businesses
- Gift Cards
- Online/Kiosk Giving
- Virtual Terminals
- Swipers for rent
- Integrations to QB, Shopify, website, invoice system, almost
anything
- ATM
- Charge-back protection
- Short-term Swiper Service
- Bill.com
- Nav.com
- Business Loans
- Loyalty Programs
- Integration into Payfac sites
- Working Capital Loans
- Equipment Loans
- Real Estate/Fix N Flip Loans
- Mini-merchant processing
- Invoice creation with your logo with payment processing and
recurring subscriptions
- Quickbooks cash discounting integration
- Financing terms for your customers
- Processing for no social security number
- Lower rates for debit card processing
- Next Day Funding
- Compliance Protection with no fees
- Fee Defender
- Payment link
- ATM
Please reach Elizabeth Poppen, The Poppen Agency with any
questions:
C: 817-798-5173 O: 469-665-9334
thepoppenagency@gmail.com
Follow on FaceBook: /ThePoppenAgency on TikTok: ThePoppenAgency
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