digital commerce, old-fashioned customer
service is still the glue that binds credit
card processors to their merchant
clients. Unlike large companies that hold
agreements for credit card processing
directly with the credit card companies,
owners of restaurants, boutiques and
professional services offices contract with
third-party processors to accept card
payments.
Change can be difficult for small
business owners as they move from
cash-only sales and see how cash flow
delays from credit card payments affect
found his corporate bank accounts frozen
by the local sheriff after a misinformed
merchant accused the processor of stealing
funds. This wasn't true. Ultimately, the
sheriff returned the money and dropped
the investigation, but only after the
processor incurred substantial legal fees
and sleepless nights. This could have been
avoided had the processor better explained
his contract terms from the outset.
Processors who rush through a contract
closing, avoid phone calls or don't answer
emails from a concerned merchant,
shouldn't be surprised if their client starts
crying "Thief!" when payments don't
show up overnight. Many lawsuits could
be avoided through clear and constant
communication with merchants. Following
are tips for creating successful, long-
lasting processor/merchant relationships.
merchants' emails. Take their phone
calls. Support them and work through
problems that arise. Check in regularly
with merchants even if you don't have
a specific reason to call. Make them
feel appreciated.
them know the procedures and timing
involved before their payments arrive.
Reassure them about hold-back
periods and how they are handled.
Look for ways to help them.
the mystery of the myriad rates and
fees. Explain why they exist and
dispel myths about padding prices.
Carefully explain costs and how to
expected. Show merchants the flow of
their funds, including date and amount
of future disbursements.
Provide a "dictionary" of terms to help
merchants unravel the contract and
statements, and to make it easier for
them to convey their concerns. Listen
attentively. Be sincere. Acknowledge
their worries. Encourage feedback.
Follow through with what you say you
will do. Build trust.
at the end of the day, a healthy business
relationship is necessary to maintain
clients and increase your bottom line.
should cement your resolve to interact
with your merchants about the terms
and conditions of your agreement. To
limit risk, a processor must have a clear
contract with the merchant. Therefore, it's
recommended that merchant agreements
include the following:
fees
termination of merchant agreement
keep in mind that if it's too long, the
merchant will not have sufficient cash
flow to maintain a business. Therefore,
consider negotiating lower transaction
fees in exchange for a longer holdback
PLLC in the firm's commercial and business
litigation practice. He represents businesses,
startups and individuals in a variety of complex
commercial disputes. His clients include
private equity lenders, toxicology laboratories,
e-commerce merchants, credit card
processors, wholesale importers and electronic
medical record software companies.
501 Brickell Key Drive
Suite 300
Miami, Florida 33131
agentislaw.com