4 best practices for working with a merchant services provider
So your nonprofit is working to implement online giving options. Great! You’ll want to get the scoop on working with merchant services providers and how the fees can affect your bottom line. Below, our friends at Dharma Merchant Services provide insight on what you should be aware of (and questions to ask) when it comes to partnering with a great merchant service provider (MSP).
1. Ask questions.
Ask as many questions as you need. A good MSP will be happy to share everything about their pricing model to ensure you’re in the know.
2. Do your research.
How will your chosen MSP service you after you sign up? Sales pitches are great but do your part to read reviews, ask about their support team and inquire into how they treat their merchants. Find out if you have a dedicated account manager. Ask about their live phone support or online chat features. Find out the average turnaround time for setting up an account or responding to a problem.
3. Read your statements and fine print.
Don’t wait to be caught off guard if/when rates increase. Be proactive and understand the likelihood of increases and what that means. Keep an eye on your MSP by monitoring your statements. Another tip? Think about a partnership with an MSP that doesn’t charge early-termination fees (see long-term contracts, below). Your MSP will be incentivized to keep your rates as-is, because they’ll know you can exit the contract without penalty.
4. Understand your total costs.
There are contracts, potential annual fees and equipment leasing costs that can affect the total price of your investment when working with an MSP. Below are some of the items to consider and ask about when feeling out your options:
a. Long-term contracts. Early termination fees often come in to play when long-term contracts are involved. If you are new to online donations and processing, it may be to your benefit to work with a provider that offers month-to-month contracts or no early termination fees. If termination fees to apply, you’ll want to fully vet the potential costs involved (which can vary from several hundred dollars to thousands of dollars).
b. Annual fees and compliances. A few common fees to ask about and understand full cost implications to you include annual fees, PCI compliance fees, monthly minimums and IRSA mandate fees. Your chosen MSP should be able to provide you with specific pricing information in each of those areas.
c. Equipment leasing. Some MSPs offer terminal or hardware leasing services which can range in fees between $30 – $40 each month (in addition to yearly lease agreements). Shop around for low prices on terminals and ask about purchase payment plans for equipment rather than leasing to save costs.
Working with a merchant services provider should be an added benefit to increasing your nonprofit’s revenue and donations online. A great provider will be able to provide you with the answers to the questions you have and do its best to make you comfortable in your decision. Let them take care of the technical aspect of raising funds online so that you can concentrate on telling your organization’s great story and moving change forward!