How Dirty Is The Business Of Payment Processing?

By The Business Solutions Network

Last week I attended the ETA Annual Meeting & Expo in Las Vegas where I spoke with leaders at dozens of various payment processing companies. A topic that came up during one appointment, which was surprising to me, was how some point of sale (POS) VARs have decided to not sell payment processing because they feel it's a dirty business.

In my numerous calls with POS VARs, I've not heard that reason enough to consider it a trend. Sure, oftentimes I've heard VARs talk about how there's a lot of smoke and mirrors with numbers, which makes it difficult for merchants to even understand whether their existing processor is giving them a deal or taking advantage of them. I also heard processing companies tell me that their competitors aren't really offering the deal they claim because of some hidden fees or other buried term(s) VARs and merchants are apparently missing.

This kind of sounds like buying a car where, if you don't know what you're doing, the salesman will just lower one number while raising another buried number and make you feel like you're getting a deal. While I understand that this has been standard operating procedure for years in the car industry, it's never felt right to me that one educated buyer can negotiate a lower price than someone else who's maybe less educated on the purchasing process or doesn't do well under pressure and misses things like numbers being shifted around.

I can't comment on how fair this is, if it's right or wrong, or even to what extent this is happening in the processing industry. I can say this: if you're going to get into the payment processing business, it would behoove you to make sure you know what you're getting into. Take the time to learn the contracts and understand all the numbers and financial aspects. You owe it to yourself and your customers to make sure everyone's getting a fair deal. Finally, if, indeed, the payment processing business is "dirty," I'd expect trusted advisers like you to rise above the dirt and bring a level of legitimacy which may have been missing in the past.