This is part of the How To Launch A 7 Figure Food Truck course from Tacofest.
What is a Merchant?
A merchant is how payment processors refer to their customers. Merchants are businesses that accept credit card payments from their customers in-person, online, or over-the-phone. Therefore, a food truck merchant services provider offers products and systems to help those businesses run.
These services often integrate with other business tools. For instance, your payment provider may connect to a POS system for a retail store or QuickBooks Online for reconciliation. They can also provide customer management, inventory systems, and payment reporting.
Merchant service providers work as the intermediary between banks, your business, and your customers. That means that however your customers want to pay, you can accept the payment and get paid.
When a customer swipes a card, the food truck merchant services provider moves the customer’s funds to your bank account. This usually takes up to 48 hours for the funds to appear in your account. Many businesses do qualify for next-day funding and can get paid even faster.
Your payment processor is where you will purchase or rent credit card terminals and mobile swipers from. Or, if you have an online business, they will integrate with your eCommerce store. Virtual terminals let you accept payments online or key in payments over-the-phone. Your food truck merchant services provider will help you find the right payment processing services for your business.
There is a lot of risk involved in accepting payments today. According to one report, almost $25 billion was lost in credit card fraud in 2016. That’s why security is so important in credit card transactions, online payments, and card number storage.
Your food truck merchant services provider should ensure PCI compliance. This means that cardholder data, including names and card numbers, are secure. Businesses can protect data by using strong passwords and updating their antivirus software.
Meanwhile, your food truck merchant services provider will maintain PCI compliance on the payment side. This includes tokenizing payment information and putting fraud prevention measures in place. Learn more about how Fattmerchant protects your payments.
You can learn a lot about your business and optimize operations based on payment data. Which customers are spending the most with you? What times of day, month, or year are you collecting the most payments? Are there products or services that you could be charging more for?
We believe that all of this data should be in the hands of business owners to make strategic decisions. That’s why we built Omni, our all-in-one payment platform. With Omni, you can track payments, create payment links, and collect invoices. Plus, but you can also view detailed reports about the state of your business.
Do you charge cancellation fees?
Unless you’re a 7-8-figure business dealing in $100k+ transactions per month, you should never work with someone who charges cancellation fees. If they aren’t earning your business month after month, then why should you be penalized for leaving?
Is there a really long contract length?
Same idea here. There are a lot of bottom feeders in the food truck merchant services industry. It’s just the way it goes, but someone asking for a 5-7 year commitment combined with a hefty cancellation fee is likely one of these and is usually something you should steer clear of.
Is there a transaction or processing quota per month? If so, what are the penalties?
This is another red flag. If you have a bad month, some merchants will charge you for it. We think that’s ridiculous at Tidal, considering they earn money for every transaction — meaning they earn more on your good months. It should be a partnership, not a relationship where the merchant service provider beats you while you’re down.
Learn more about Tidal’s payment processing.
On a similar note, is there a transaction cap? If so, what are the fees for surpassing it?
Same idea. They are already earning more money! Why should you be charged?
Do you have a staff member who helps me with chargebacks?
Chargebacks are the perennial thorn in merchants’ backs, and reputable MSPs like Tidal offer a chargeback assistant to help fight back against fraud and customer chargebacks.
How does your company approach PCI Compliance?
Just because you have PCI-compliant software doesn’t mean you’re PCI compliant. PCI compliance is its whole little world, and some food truck merchant services providers leave it all up to you while others proactively equip you with the best resources and software. Make sure it’s the latter.
If they offer a low entry rate — why? Where do they make their money, and why don’t they just have a benchmark percent they can rely on?
Here’s the thing. No one gives away software, hardware, or insanely low payment processing rates without knowing they’re going to make it up somewhere else. If a rate or deal seems too good to be true, it probably is — this is where you look out for fees more than anywhere else. If someone gives you free terminals and a 1.5% flat rate, they’re either taking advantage of you or will go out of business very, very soon.
Do you have any breach assistance?
Some Merchant Service Providers like Tidal offer breach assistance in case of PCI compliance violations. This is super nice to have in your back pocket in case you’re liable for a breach.
What kind of software and hardware do you all sell or provide?
The best merchant service providers equip you with the hardware and software you need — everything from PCI & HIPAA compliance dashboards to sales analytics, to smart, mobile terminals. Make sure the MSP you’re looking at has what you need at a reasonable cost.
What kind of technical support do they offer?
Nothing is worse than have an outage during a rush and your MSP not being there to help. 24⁄7technical support is the only way to go.
What kind of rate do they charge? Is it flat rate? Interchange plus? Both? How will they help your business decide what’s best for you?
Your MSP should sit down with your statement and figure out what’s best for you. Not all businesses are equal, and depending on your transaction types and frequency, you may be a better fit for one pricing structure over another. Make sure they do the work to answer that question thoroughly.