4 Processing Mistakes Your Business Should Avoid | Fora Financial Blog
4 Processing Mistakes Your Business Should Avoid
June 07, 2018

4 Processing Mistakes Your Business Should Avoid

For people who don’t own a small business, it may be surprising to learn that 55 percent of America’s small businesses still don’t accept credit cards. However, if you own a business that processes credit card payments, this finding probably sounds quite reasonable. That’s because the financial burden of processing transactions is immense if you aren’t careful about how you handle the payment process.

That said, the benefits of providing your customers options other than cash usually outweigh the costs, especially if you understand how to avoid common payment processing mistakes.

To avoid four common and costly processing mistakes, we suggest following our practical advice that’s featured in this post!

1. Not Reading the Fine Print

Hitting “next” on the screen and seeing an error message saying you neglected to check the “Terms and Conditions” is annoying at best. At worst, however, not reading the fine print and signing a contract that you don’t fully understand can be very costly for your business.

Citing a Fairer Finance survey, The Guardian reported that 73 percent of all people skip to the next page after checking “I Agree” without actually reading the terms. Of the percentage that takes the time to read through, only 17 percent understand what the terms mean.

Reading and understanding the terms and conditions of a processing company is important because the fine print can contain vital information about hidden fees and contract structure.

How to Avoid

Never sign a contract without fully understanding the terms. If that means spending a few extra minutes to study the terms, then take the time to do so. Your business could avoid exorbitant fees, services you don’t need, or a non-negotiable, never-ending contract.

If your contract contains strict conditions, it may be better to go with a different processing company even if the upfront fees are higher.

2. Not Checking Volume Requirements

Some processing companies require a minimum number of transactions to be processed each month. This is especially important to check if you own a small business. If you don’t hit the threshold amount, you could be charged extra fees.

How to Avoid

Understand your business. Low-volume card processing companies like PayPal exist to help even the smallest businesses accommodate credit card transaction fees. Knowing your business’s sales volume and needs will help match you with the right payment processor.

3. Not Fully Understanding Chargebacks

Chargebacks occur when a consumer pays for a service, returns the service and gets their “charge,” or payment, back. Businesses use this system so consumers can avoid fraudulent purchases on their accounts, but the system can backfire from deliberate abuse.

How to Avoid

To maximize your business’s profits, be as transparent as possible with your return policy. Fine print and terms and conditions are as important to you as they are to your consumers. Consistently offering high-quality services will also minimize the number of chargebacks you receive and will help you avoid these fees.

4. Not Knowing the Difference Among Fees

One of the most important factors to consider when choosing a payment processing provider is the number of fees you’re paying. Credit card processing fees aren’t just between you and the payment processing provider; card-issuing banks and the credit card companies are also involved.

Processing rates are what a third-party provider like PayPal or Square charges your business for accepting credit cards. Interchange is what the bank collects from each transaction. Assessment fees are what the credit card companies collect. Together, interchange and assessment make up the base amount of what a card processing company charges.

Card processing companies don’t have any control over interchange and assessment. Any rates they offer you are a “markup” from the base rate. In other words, low rates don’t always equal low cost.

How to Avoid

Along with reading the fine print, assess each processing company you’re considering and understand the difference among the fees they might be charging. Shop with markup in consideration, rather than numbers and rates.


With the right company and contract, introducing plastic to your business transactions can be simple and stress-free. Don’t let the hassle of card processing fees stop you from experiencing a potential increase in sales and profit. Know your business’s sale volume, read the fine print, beware of chargebacks, and shop with markup in mind.

Fora Financial

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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Fora Financial is a working capital provider to small business owners nationwide. In addition, the Fora Financial team provides educational information to the small business community through their blog, which covers topics such as business financing, marketing, technology, and much more. If you’d like to see a topic covered on the Fora Financial blog, or want to submit a guest post, please email us at [email protected].