Credit card processing is essential to modern small businesses. Working with a credit card processor allows you to accept debit cards and credit cards as payment, both at the point of sale and online. As more customers go cashless, credit card processing is increasingly important; it’s no longer a matter of choice, but a necessity for most businesses.
However, when choosing a credit card processing company to work with, there is more to keep in mind than rates, terms and conditions. You should also stay on the lookout for one of the many scams and shady practices that plague the industry.
Here are some of the most common scams in the credit card processing industry and how your small business can avoid falling victim to them.
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Common credit card processing scams
When you are researching credit card processors, there is a lot to keep in mind. Choosing a viable processing partner is a complicated and labor-intensive process that requires you to study multiple pricing models and clearly understand your potential processor’s terms and conditions.
The process is made more burdensome by the risks of encountering fraudulent practices or scams designed to rip you and your customers off. But as G.I. Joe said, knowing is half the battle. Awareness of the most common types of these scams can protect you from stumbling into a bad situation.
Low-risk wholesale processing
One of the most common scams you might encounter involves an unsolicited offer of “wholesale processing,” typically accompanied by a message that you’ve been designated a “low-risk” business.
You might receive a message from a credit card processing sales representative that says something like, “Your