At the risk of getting a silly 90s song stuck in your head (maybe I already did with this title?), I noticed that there is an easy acronym to keep in mind when choosing a credit card processor.

ICE ICE baby! Interchange plus, contracts, and extraneous fees that is….

Interchange Plus- The most transparent form of pricing. Make sure that all quotes from processors are in interchange plus format. Interchange is the fee that MasterCard/Visa charge to process payments, and it is set in stone (meaning it’s the same no matter which process your choose). The “plus” part is variable…this includes processor markup which is the service fees that business owners pay to actual processors for their payments. Usually there is a percentage and per item fee, along with a monthly fee. Watch out for Tiered Pricing which is a big ripoff.

Contract- Always read the fine print. Processing contracts are made confusing so business owners don’t look at the details. For example, many contracts contain hefty cancellation fees which can usually be negotiated. Also, watch out for reserves, which happen when a processor notices “risky” behavior from a merchant and keeps money in a separate account to account for any special circumstances.

Extraneous Fees- Batch fees, statement fees, you name it. Processors pile them on. Make sure exactly which fees you are being charged as many of these can be avoided. If you pay close attention to your contract and negotiate all points, the processing environment is so competitive that you are likely to have the upper hand  and can get rid of most extraneous fees. Watch out for teaser rates with will advertise an extremely low rate, but ultimately jack up processing costs with hidden fees.