Choosing a Merchant Account Provider in Canada

Choosing a Merchant Account Provider in Canada

Are you setting up a new business or moving from a cash-only establishment to one that accepts debit and credit cards? If so, it’s crucial to choose a service provider that allows you to accept payments via phone, in person, and online.

Most people now prefer to pay with “plastic money,” i.e., credit and debit cards, or even their phones, over carrying cash.

This is why only 33% of Canadian small businesses remain cash-only, and they are also gradually jumping on the bandwagon to go cashless.

The Canadian e-commerce market is growing by the minute. In 2018 alone, there were a total of 19.8 million e-commerce users and the number is expected to rise significantly in the coming years.

This means that the use of credit and debit cards is at an all-time high. Moreover, over 75 million cards were in circulation in Canada in 2018, according to a report published the same year.

You need to choose a credit card processor to accept payments, which are carried out at your end and then transferred to a merchant account.

Subsequently, the merchant account transfers the amount into your business account within a pre-determined period. It could be on a daily, weekly or even monthly basis.

How to Choose a Merchant Account Provider

Selecting the right merchant account provider is challenging to say the least — you will need to consider these factors:

  • The payment processing fees
  • Buying or leasing the right equipment
  • Length of service and other legal considerations

It is important to do your research to choose your merchant account provider, as any negligence can prove costly in the long run.

Fortunately, there are quite a few great merchant account providers in Canada. Additionally, some American credit card processors also provide merchant facilities to Canadian businesses.

Almost all providers allow processing of MasterCard and Visa — which are globally accepted payment mediums.

Ask yourself the following questions to ensure that you find a quality provider:

Does the Provider Offer Hardware?

To start swiping cards, you will need to have the right hardware to process payments. Therefore, you should make sure that the merchant provides you with standard equipment so you can start accepting cashless payments right away.

Most card readers now offer mobile payment options, in addition to wired and wireless payments.

However, the wired option is considered to be the most reliable and user-friendly, but it depends on your business needs.

Pro Tip: Choose a merchant that not only allows for credit card transactions but also accepts payments through other gateways such as NFC, Android, Apple Pay, etc.

What’s in the Contract?

Most merchant account providers offer long-term contracts, which may last up to three years.

However, these contracts can have unfavorable terms and conditions for the business owner. These include auto-renewal clauses and significant termination charges if you discontinue the service before the deal ends.

Are There Any Hidden Charges?

You may choose a particular provider solely because they have the lowest fee per transaction. However, this is often used to compensate for the low rates, merchants charge clients some extra fee in other ways.

Over time, these costs accumulate into massive amounts, which can become challenging to pay for small and medium-sized businesses.

As a preemptive measure, choose a merchant that is transparent about all charges. This will help you compare the services and payment structures of different merchants and avoid lagging in payments.

Do They Offer Customer Support?

Imagine a customer walking away because you are not able to process their card due to a malfunctioning reader? Such issues are quite common and prompt responses are needed for a smooth operation of your business.

To counter this issue, you should subscribe to a merchant account provider that offers customer service 24/7. You should also ensure this provider has a reputation for exceptional service, so you know that your issues will be solved stat as they arise.

The merchant’s website should have several resources, such as a list of FAQs, a live chat option, and the ability to reach out to them on call at any time.

Key Takeaways

It goes without saying that accepting card payments is necessary to run your business efficiently and to avoid losing customers.

Making use of the pointers mentioned here will help you make a wise decision when deciding on the optimal merchant account provider for your requirements.




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