Construction credit card

 

Selecting a credit card processing company presents a unique set of challenges when you own a construction business. Because of construction’s project-based nature, payments are often large and intermittent. Plus, you may want to accept card payments in various ways to make it convenient for clients to pay you. For example, in addition to accepting credit card payments over the phone and in person, you may want to accept card payments online via invoices and in the field using a mobile POS system connected to your phone. 

While much of the information here can apply to any business, we’ll look at special considerations for construction businesses when choosing a credit card processor, including what to look for in contracts, rates and fees.

Here are seven tips for choosing a credit card processor for your construction business.

1. Get a merchant account.                         

There are two main payment processor types. Most processors are ISO/MSPs that you can set up with your merchant account. This type of processor is best for companies that process more than $3,000 per month and those with varying

 Transaction amounts, so it’s likely the best fit for your construction business.

The other type of processor is a merchant aggregator or payment facilitator. These companies sponsor multiple businesses under their master merchant accounts. Businesses that process less than $3,000 per month may save money by working with this type of processor because it usually charges a flat rate with no monthly or annual fees. However, aggregators tend to be more risk-averse than ISO/MSPs, and irregular transaction amounts can trigger a fraud alert that causes the processor to freeze your account.

Editor’s note: Looking for a credit card processor? We can help you choose the one that’s right for you. Use the questionnaire below to receive information from a variety of vendors for free

 

2. Be upfront about your transaction amounts and volume. 

When you’re calling for a price quote, the credit card processing service’s sales rep will ask you what your average ticket (invoice) size is and the dollar amount you process – or anticipate processing – each month. 

It’s important to be as accurate as possible with these numbers so the rep can give you accurate pricing. And, if you decide to proceed with the company, this information will help the rep set up your account correctly. If you have an irregularly large transaction coming up, or if your business is busier than average and you anticipate processing a higher volume of transactions, you can call the processor ahead of time to get approval.

3. Choose a company that offers month-to-month service.

When it comes to a contract, you’re seeking the same quality other small businesses look for in a payment processor: no lengthy terms. This is important because if the processor’s services end up not being a good fit for your business, you can close your account without penalty.

Processing contracts typically have three-year terms and charge expensive early termination fees if you cancel the service before the term expires. It’s important to read the contract to verify the term length, cancellation procedure and applicable fees before signing with a company. 

When you request the contract to review, the sales rep may send the application only; however, this is only one part of the contract, so you may need to specifically request the terms of service and program guide. The program guide is typically where the information regarding the cancellation policy resides.

4. Request interchange-plus pricing. 

Industry experts recommend the interchange-plus pricing model. However, many of the sales reps you call will quote you the starting rate for tiered pricing – also called the “qualified rate” that only applies to regular cards you accept in person – so you may have to specifically request an interchange-plus rate.

Some sales reps may discourage you from choosing an interchange-plus plan because the company makes less money with it than with a tiered pricing plan. Others may have specific prerequisites before you qualify for their interchange-plus plans. For example, they may require you to process a certain transaction volume each month or be a customer for a certain amount of time. However, the best credit card processors offer interchange-plus pricing to all their customers without these restrictions.

Another reason to opt for interchange-plus pricing is that it gives you a level ground for comparing quotes. This pricing model is based on interchange – a table of rates set by the card networks – and everyone pays the same amounts. The processors add a markup to these rates, and that’s the rate you’re quoted, so you can easily see which companies offer you the lowest rate.

Tiered pricing is difficult to compare because processors add markups to the interchange rates and then sort them into tiers. The number of tiers and the types of cards and transactions sorted into each one vary by processor. However, many have three tiers for credit and debit cards: qualified, mid-qualified and nonqualified.  https://entrepreneurshipg.com/9-best-credit-card-for-construction-business/

 

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