This is a guest post from Tekmetric, a 360 Payments partner.
It’s easy to get overwhelmed when shopping for a credit card payment processing service. With so many companies competing for your business, it can be difficult to know which offer is the best, or even how you might evaluate a company’s service.
Card processing, like many business banking transactions, is more complicated than it seems on the surface. What a business needs from its card processing service can vary from industry to industry. And when it comes to automotive repair, the need can change from shop to shop or location to location.
We recently asked Lisa Coyle, Co-CEO of 360 Payments, to help us demystify card processing for shop owners. Here are the top five things she recommends to keep in mind when making your card processing service decision.
1. Service is More Important Than Price
The first thing that most shop owners look at when shopping for a credit card processing company is the price. You want to get the most bang for your buck in terms of interest rate per transaction. However, the rate estimates that card processor salespeople provide can often be misleading.
For example, did you know that the type of credit card that your customer pays with can affect the interest rate of the individual transaction? Did you also know that keying in a card number by hand is more expensive than simply swiping or inserting the customer’s card? It’s like the difference in repair costs between a mid-size Japanese sedan and a luxury European crossover. The kind of transactions that your shop makes can come with their own unique circumstances that affect the average rate of your card payments.
What really makes the difference in card processing is the service itself. Your card processor needs to be able to help you troubleshoot transaction problems at a moment’s notice. They not only need to handle the volume of transactions that you make each day, but they also need to understand the kinds of transactions you’re making and quickly resolve any roadblocks that could delay the release of those payments to you.
Ultimately, you want to build a relationship of trust with your card processing service. Just like you have a relationship with your CPA, your business lawyer, your shop management software, and your insurance representative—and like your auto shop customers have with you—you need to build a rapport with your card processor and feel comfortable working with their team. You should be able to trust them to handle your card processing needs and to be there if you run into snags with a transaction. At the end of the day, a card processor that you trust will serve you better than one whose rates are advertised as the lowest.
2. Never Sign a Contract or Lease a Machine
Expensive card machine leases and long-term contracts with termination fees are two of the biggest red flags when selecting a credit card payment processing company. Credit card terminals are relatively inexpensive machines for a business to purchase; even the most high-end technology on the market will incur minimal costs when setting up your card payment system. When you’re talking to a card processing salesperson, ask them what their termination fees are. If the number is anything north of $0, that’s your sign to terminate the conversation. There should never be a penalty for you to cancel a card processing service if you think that you aren’t being treated fairly.
3. Research and Read the Reviews
While no two auto repair shops are alike when it comes to credit card processing, it’s helpful to seek the advice of others in your industry who have been down the same road. Before taking a meeting with a salesperson, search online for reviews from other auto repair shops. If you are a member of any shop owner groups on social media platforms, post to those groups to see if anyone has used a company that you are considering.
One red flag to look out for is how many times that a card processing company has changed its name; if a company rebrands itself often, it may be an indicator that they have a history of poor service. The Better Business Bureau keeps an online database of accredited card processing companies, along with vetted reviews of the service they provide.
If you’re curious about how good a card processing company’s service is, call their customer support line as if you were already a customer and see how long it takes before you’re connected with a live person. If you find yourself navigating a confusing automated menu and are left on hold for 20 minutes, imagine having your service advisor go through that process while an impatient customer is standing in front of them trying to pay for their repairs.
When looking at a card processor’s reviews, it’s also helpful to keep in mind that your shop’s needs may differ from the needs of another auto repair shop. For example, if your shop has a regular contract to provide maintenance services on a company’s fleet vehicles, your monthly transactions may operate differently from a shop that only works on non-commercial cars. If you are a single shop owner with a low ARO, you need to feel confident that a company will treat you with the same level of care and attention that they would a large franchise customer. If your goal is to go paperless with text-to-pay options, email invoices, and other modern shop management offerings, you want to make sure that your card processor can provide the technology to realize that goal.
4. Find a Payment Processor That Understands Your Industry
Just like no two auto repair shops are alike, the auto repair industry itself has its own quirks when it comes to payment processing. For example, the busiest day of the week for an auto shop—Friday, typically—may see significantly higher credit card payments than on its slowest day. In other industries, the day-to-day payment disparity that’s normal for an auto repair shop could be flagged as suspicious, which would place a hold on the release of those funds to the seller. If your credit card processor doesn’t understand these idiosyncrasies, you could find yourself blocked from accessing the funds that you need to cover shop expenses.
The auto repair industry is different from many other goods and services. Since the customer doesn’t pay for repairs or service until the job is done, the shop has to front the costs for parts and labor. Depending on the kind of work that’s required and how long it will take to complete, it could be weeks before you recoup those costs and earn a profit on a repair order. If the payment is delayed further due to issues with the card processing company, your business is suddenly at risk of being unable to fund basic operations.
Simply put, your credit and debit card processing company must understand the intricacies of the auto repair business and work with you as a shop owner to remove any obstacles to card payment.
5. Look for a Solution That is Ready for the Future
The majority of transactions nowadays happen through credit card processing. It’s rare for the average person to go a full day without using their credit or debit card at least once. From the smallest transaction to the largest purchases, it’s almost a reflex for a customer to reach for a piece of plastic instead of cash.
But that’s not the only way that payment is changing. Many of today’s customers prefer to use remote, contactless methods of payment that they can execute on their phones without having to stop and talk to anyone. Young professionals and families with small children may not have the time to answer the phone or pick up their vehicle during your shop’s business hours, leading to delays in receiving payment for the work your team has invested in.
When looking for a company to process your credit card payments, it’s important to remember that the people who should find it the easiest to use are your customers. This could mean that every service advisor is equipped with a wireless card processing machine that they can carry out to the customer’s car. It could also mean that you can attach an invoice to your technician’s inspection that your customers can pay through text message. Or it could be any combination of these services.
With more payment options available to your customers, you are more likely to be paid faster for your auto repair work.
Looking for a quality payment processor backed by 21st century features? What if it seamlessly integrated with a 5-star shop management system?
See why 360 Payments has partnered with Tekmetric to create Tekmerchant, a payment processor built for shops who value quality and technology.
Learn more at tekmetric.com/tekmerchant