|January 11th, 2019|
Banks have very significant role to play in a nation’s economy and the economic development hence forth. Times when electronic payments first started in yester decades, payment industry has come a long way from then.
The rapid rise and expansion which the payment industry has seen is majorly due to the advancement in technology. It would not be fair if the participation of banks and payment processing services shall not be appreciated in the given regard. They are inextricably responsible for, wherever the industry will be leading to in next 5 years. Technology is bringing to you new and better ways of making payments fast, easy and secure than ever before; still the steering is in the hands of the relationship between banks and payment processing service companies.
Reason Behind Banks Declining Many Merchant Account Applications
How a merchant account application can seek approval from issuing bank is a much talked about topic. Lesser is thought and taught about what banks should see in their merchant service partners. Banks are trusted by one and all. They simply cannot afford to go wrong as the repercussions are far-reaching. It is not difficult to comprehend that any small mistake at the bank’s end can affect national economy, payment industry to an extent and merchants’ and their own business to extreme.
Have you ever wondered why banks say ‘yes’ to a few and ‘no’ to many merchant account applications? Well, the fact of the matter is that banks have to understand the risks involved in a business. That said, the risks are of several kinds, including the ones that are deeply rooted in the nature of industry and the ones that surface due to the credit history of a business.
Without further delaying it, below given very important points are for perusal of banks and financial institutions, so that they make only the right choice for their customers, industry and economy as a whole.
What is the annual merchant retention rate?
Banks should not consider credit card processors who fail to retain their merchants. Since, it will be directly affecting the portfolio of your bank. Association with merchant service providers that have low merchant retention rate would not let your marketing strategies succeed.
No matter how successful you are with your sales and marketing, if the annual merchant retention rate of your merchant services partner is not high, your portfolio will only churn, but not grow.
How do you rate their customer service?
Banks follow the good old marketing quote- “Customer is king”. You have to give your customers the best in terms of products and services. But above all you should have an excellent rapport with them. For this, you pay a lot of emphasis on customer relationship management. But is your payment processing partner in sync with the kind of services you proffer?
Do they provide excellent customer service or not, shall help you take decision in their favor or otherwise.
How old are they?
Inexperienced merchant services provider shall get fair chance of trying luck. It still, cannot happen at the cost of losing your customers. It is always recommended to tie up with only experienced processors. Check their backgrounds for how successful their previous associations with other banks have been.
You would not be able to succumb or ignore the customer who is a merchant and customer to partner processor too.
What is purpose of their existence?
Of course, they are in market to make money. But in the payment industry, the processing partners perform to enable merchants make more money. With so much money involved, are they having some business vision or not?
It is important to ascertain how they thrive. Banks should pay special attention to embark the similarities, if any, and differences, at least major ones between the vision and culture of the two organizations.
Missing on this element in your selection procedure, banks frequently end up losing their patience. Future frustration can be avoided by making present precautions. Do know what culture they follow. It will ensure your hard earned reputation is not diminished by any card processing services.
Do they comply with the PCI compliance process?
In many cases, banks receive complaints that merchant services provider left to the merchant. PCI compliance process is something merchants usually are reluctant to figure out on their own. When service providers suggest merchants to handle PCI compliance on their own, bank can lose its merchant customers.
You need merchant services that approach your customers to guide them through the PCI compliance process. Also, refrain yourself from tying up with the partner who collects monthly compliance fee.
Will they conduct a training program for bank employees?
Unless your employees are properly trained, they won’t be able to solve the customer queries related to payment processing. Ask if training is provided only in the initial period or there are some boost up sessions too. Ask these questions and you will realize how good the support will be. An ideal partner would be offering a comprehensive bank training program as they will be working for mutual benefits.
What chain of communication they follow?
Transparency results from open line of communication between bank, service provider and bank’s merchant customer. To foster a long term professional relationship it is important that they prioritize and value your relationship.
True that, bank enjoys the liberty to choose partners from pool of payment processors. But at the same time, it holds the responsibility to conglomerate with only the genuine ones.