Remember what (hopefully) your parents taught you? "Don't sign anything till you've read it through!" Totally brilliant advice, but, let's face it, how many of us do? When you signed that life insurance, or car insurance application, did you read ALL the fine print? How about a mortgage or loan doc? You did? Wow, high fives and mega-kudos to you. The fact is, most of us ever read any of the fine print beyond maybe a line or two.
But, if you're signing a loan doc, or, as you will soon learn what prompted this post, a Merchant Services Agreement, you do look at the dollars and cents part of it, yes? And the term? And the penalties (if any) for breaking the agreement early? I think we all do (hopefully!!). But, 1 month, 6 months, 12 months down the track, do we remember what we signed? Perhaps you get the idea where this post may be going....
PayPal is good when you're starting out
PayPal gets a lot of flak about their "high" fees, and, it's true, their fees are up there with the "best" of them. But they're no worse than most other "convenience" providers such as Square, Stripe, Skrill, et al. These services are all usually pretty simple and easy to set up and use, and they'll tend to take anyone or any business regardless of history or lack thereof. So it's no surprise that, when we started CitrusKiwi, we used PayPal to collect our monthly subscriptions. We got with them before they had their fancy button creators and did a bunch of coding in the background of each button to give us a 45 day delayed start on payments (which we still do today - pay NOTHING for the first 45 days while we build your site) and recurring 3 monthly payments. After reading a few of their developer docs, we thought we were pretty cool with our custom buttons. In fact, one time we rang support about an issue and THEY couldn't understand what we'd done!
However, about a year ago, we decided we'd gotten enough turnover to leave the PayPal "nest" and get a fully fledged Merchant Serviced Processor. We chose Authorize.net for 2 reasons; firstly, here in the States, they are the 800lb gorilla in the room, and secondly, because of that, they're the most common one to appear in payment plugins that we use. So that was settled; now to find a Payment Processor (PP). This is where it got ugly.....
Merchant Services Processors have their reputation for a reason...
The old saying "Where there's smoke, there's fire" applies well to PPs. Google something like "Payment Processor compliant" and there's a wealth of (very sad) reading. Over-charging, refusal to release funds, exorbitant penalties, the list of complaints go on and on.
When we decided to change, we found out early on that, as web designers, we somehow belonged to an evil empire and were treated a little like lepers were in the days of Jesus. We were tolerated as long as we stayed away. We received numerous rejections because our industry apparently had a bad reputation (now ain't THAT the pot calling the kettle black!!) for being unreliable. Eight years in business and never a charge back, but, "don't ask us to assess on a case-by-case, you're a web designer, therefore bad!" It got to the point where I was about ready to re-embrace PayPal as my long lost BFF!
Finally we got accepted, Authorize.net got linked and we started to process. Woohoo! Then, without notice, processing stopped after a week - about 3-4 payments. Hard to get any information out of them, but it transpires that, despite accepting us and even processing a few payments, they realized they'd let one of the "evil empire" through and summarily cancelled our account. Well, thanks for the heads-up... not! We managed to find another PP who would take us, and we went to great pains to confirm with them that, as part of the "evil empire" they were prepared to take us on-board. "Absolutely!" says they. That one lasted three weeks and a maybe a dozen and a half payments. Again, cancelled without notice. I was beginning to feel, personally, why this industry was so hated.
Finally, all this nonsense seemed to go away and we found a PP out of Sacramento who got us sorted in July 2018. Of course, for the first couple of months we kept an eagle eye on transactions to ensure we weren't surprised by another cancellation. We weren't.
Remember what you signed
Now to the whole point of this post - remember what you signed.
The company we were with had slightly higher rates than I'd seen while shopping previously so, with coming up a year of processing under our belts, we went searching for a better deal. Which we found. Plus the PP's portal for getting information was truly horrible. Clunky and slow. A nightmare to interact with.
So we found a new PP with better rates and a better portal and we jumped ship. We then wrote to our old PP. Ouch! That's when Payment Processing really bit! Seems we had contracted for 3 years with these providers at a minimum $35 per month, so are now faced with a nearly $1000 "out" to cancel. Obviously we must have agreed to the terms (though we can honestly say, we never saw the 3 years spelled out anywhere - must not have read it properly), but had we REMEMBERED the terms we'd never have changed in the first place. The savings we got by switching are more than eaten up by the penalties.
The moral of the story is, as the title says, remember what you signed. ESPECIALLY if it's with a Merchant Services Provider....