5 Things You
Should Know Before You Renew Your Debit or Credit Processing Contract
1.
Yes,
you are probably paying too much. The application of technology and ongoing
competition continue to translate into lower pricing at contract renewal
time. If you have not negotiated your contract in
the past 3 years, you could be paying too much. Your processor wants your
business and is usually willing to reward your patronage with price reductions
and signing bonuses.
2.
Not
all processors are equal. Product differentiation means different processors
have different strengths. There are processors with great terminal driving,
others provide the best analytics; some have strong fraud management, while
others have excellent back office tools. No single processor is the best at
everything. Find the one that best meets your needs.
3.
Network
selection and processor selection are NOT the same thing.
Choose your network partner (NYCE, STAR, PULSE, etc) based on the merits of
network membership, namely interchange and network fees. Then choose your
processing partner based on the products and services that meet your needs.
Sometimes you’ll get both from one vendor, sometimes not.
4.
Check
Out the Competition. Even if you are happy with your vendor, it’s
helpful to take some time to learn about the latest product features offered
and to get a good sense of the current market pricing. When your vendor knows
you are shopping, they are more likely to bring their “A” game to the contract
renegotiation process.
5. You
do not need to hire a consultant to get lower prices! Simply requesting a
competitive quote will generate price reductions. For this reason, you do not
need to pay consultants a percentage of cost savings. If you hire a consultant,
ALWAYS insist on a fixed fee.
Need some help? A good consultant will assess your
priorities, provide an evaluation of processor strengths and weaknesses, and
prepare an apples-to-apples pricing comparison. If you hire a consultant, be
sure they are experienced in the nuts and bolts of the payments industry.
Attorneys and ‘contract specialists’ can be helpful from a legal perspective,
but the vendor selection process is ultimately a business decision, not a legal
one.
Suzanne :-)
www.savagecg.com
