Credit Card Processing Pitfalls

Credit Card Processing Pitfalls

Recently I have had to deal with my credit card processing company. It is one of those frustrating things that you have to deal with as a small business owner. There are always a lot of people trying to get more of your money and one has to be diligent.

It is always best to review your rates at least once a year and see if you can get them lowered. Now is an opportune time in Canada to actually get them lowered. It was not that long ago that the Canadian government deregulated the credit card processing industry to bring in more competition. There are now a lot more options that you can choose from and they are all competing for your account. It is like getting a mortgage on a house. It is best to shop around to find the best rate. The impact to your bottom line is in the thousands of dollars.

My particular supplier sent me a notice on my statement in July saying that they were going to raise my rates. Credit Card processing companies are required to give 3 months notice if they are going to raise your rates. This notice of course was delivered in a very sneaky and inconspicuous way. It came on my regular monthly statement outlined in a little box at the top of my monthly statement. It had the look for the most part like any other statement that I had received. I was lucky that I caught it and was fortunate to be able to find a much better deal with a different provider.

If I had not caught this increase I would effectively be stuck with this increase and would have had a much harder time getting it lowered. Some of these companies set up your contract so that it automatically renews itself which and will keep you locked in for another 3 years. You are of course allowed to break the contract but there is generally a $300 dollar tag attached to it.

The important thing to be aware of is that you can cancel your contract with them without penalty as long as you do it within the 3 month time frame. This is set out by the government on codes of conduct these business must follow http://www.fin.gc.ca/n10/data/10-049_1-eng.asp

Unfortunately my provider tried to hoodwink me into believing that I would have to pay an early close out fee in closing my account. At the beginning of the conversation with them, they actually went as far as to tell me that they were not raising my rates. I had to actually read the statement that they sent me and still they denied it. I then said that I was going to close my account anyway to which they replied in a circular argument that “I would have to pay an early closing fee. “ This is all in an attempt to make sure that you do not switch providers or that you wait long enough that you will have to pay the closing fee. I thought mistakenly that the major company that I delt with would uphold higher business standards. This was not to be the case and is the reason I am writing this blog. Hopefully anyone that reads this won’t fall for some of theirs or others dirty tricks.

P.S.  Don’t forget to check your July statement and see if you are with this particular provider. You still have until Oct 1 to change without penalty.