Payments are the backbone of your business, yet many merchants face unnecessary hurdles – from lengthy applications and slow approvals to hidden fees, high reserves, and delayed payouts. If you’re struggling with your payment service provider, it’s time to reassess whether your setup is truly working for you.
Here’s the reality:
- 67% of businesses overpay on processing fees.
- 40% experience failed transactions.
- 53% deal with slow payouts.
If any of these sound familiar, your card payment processing provider might be costing you more than just money – it could be slowing down your business. But there’s a better way to navigate these challenges.
In this blog, we’ll explore some of the most common challenges businesses face with their payment service provider and uncover the key warning signs that indicate it may be time for a change. We’ll also discuss the importance of merchant accounts and compliance, reveal the hidden costs of a poor payment processor, and compare industry best practices versus common pitfalls in payment processing.
You’ll learn how to identify and address high processing fees, slow payouts, frequent transaction failures, poor customer support, and security risks. Plus, we’ll guide you through a quick self-assessment to determine if your payment provider is working for you – or against you.
Understanding the Importance of Merchant Accounts and Compliance
A merchant account is not just an option – it is a requirement for businesses that want to accept card payments. Without one, you simply cannot process debit or credit card transactions. Essentially, it acts as a holding account where customer payments are temporarily stored before being transferred to your business bank account. Therefore, choosing the right merchant account provider ensures smoother transactions, faster payouts, and lower fees.
However, obtaining a high-risk merchant account isn’t always straightforward. Businesses must meet certain requirements, and some industries are considered high-risk, leading to higher processing fees and stricter approval processes. That’s why understanding the essential steps for smooth merchant account approval – such as having a clear business model, accurate financial records, and a secure website – can significantly improve approval chances.
PCI DSS (Payment Card Industry Data Security Standard) compliance is mandatory for any business accepting card payments. It ensures that merchants handle cardholder data securely to prevent fraud and data breaches. Non-compliance can result in fines, increased transaction fees, or even the termination of your merchant account.
Additionally, your Merchant Category Code (MCC) determines how payment networks classify your business. While MCC assignment is generally straightforward, it directly impacts processing fees and transaction eligibility. Therefore, having the correct MCC ensures your business operates smoothly without unnecessary restrictions or delays.
Why Merchants Consider Changing Their Acquirer or Payment Provider
Merchants may consider switching their acquirer or payment service provider for a variety of reasons, particularly when inefficiencies start to impact profitability and customer experience. Below are some of the most common factors driving businesses to seek better alternatives:
- High processing fees – As businesses grow, they often find that their current pricing structure becomes too expensive. Some providers charge anywhere between 2% and 5% per transaction, and complex pricing structures can make it difficult to track costs. Merchants may seek providers offering more competitive rates or pricing models better suited to their transaction volume. CardCorp also offers full fee transparency through CardCorp Connect‘s real-time reporting, so you always know exactly what you’re paying and why.
- Poor customer support – Deteriorating support, especially following industry consolidations, can prompt merchants to switch to providers offering more attentive service. Unresponsive or unhelpful support can leave businesses stranded when issues arise.
- Technological limitations – Businesses may outgrow their current provider’s capabilities, requiring more advanced processing features, tools, or payment methods to support further growth.
- Streamlined operation – Merchants may prefer a single point of accountability for both merchant account and gateway services, simplifying problem resolution and overall management.
- Innovative solutions – As the payments landscape evolves, merchants increasingly look for providers offering innovative features like account updaters for recurring payments or advanced fraud prevention tools.
- Regulatory changes – New regulations promoting transparency and competition in the acquiring market have made merchants more aware of alternatives and increased their willingness to switch providers.
- International expansion – Businesses expanding globally may seek acquirers offering better coverage of international payments and local schemes across multiple countries.
- Improved integration – Merchants may switch to providers offering better API integrations or compatibility with their existing business systems.
- Slow payouts – Waiting days or even weeks for funds can create cash flow issues, making it difficult to manage expenses and invest in growth.
- Frequent transaction failures – 40% of businesses experience failed transactions, leading to lost sales and customer frustration.
- Security and compliance issues – With cyber threats on the rise, weak fraud protection can put businesses at risk of financial loss and reputational damage.
- Chargebacks and disputes – Without proper protection, chargebacks can result in financial losses and increased fees.
- Limited payment options – If a provider doesn’t support multiple payment methods, merchants may be losing potential sales.
By switching to a more suitable acquirer or payment service provider, merchants can potentially reduce costs, improve operational efficiency, and enhance their customers’ payment experience.
The Hidden Costs of a Poor Payment Processor
Many businesses focus on transaction fees alone, but the true cost of a poor payment provider extends beyond percentages. Consider the following:
- Lost revenue from declined transactions – Every failed transaction could mean a lost customer.
- Time spent managing payment issues – Time spent on disputes, chargebacks, and support calls takes away from running your business.
- Missed growth opportunities – High processing fees, slow payouts, and high reserves restrict cash flow, limiting your ability to reinvest in your business.
A better payment processing solution isn’t just about cost savings – it’s about creating a seamless experience for both your business and your customers.
5 Red Flags You Shouldn’t Ignore
If your payment processor isn’t working in your favour, it can cause more harm than good. Here are five major warning signs that indicate it may be time to make a change:
1. High Processing Fees That Cut Into Your Profits 🚩
Are you paying more than you should? Many businesses unknowingly accept excessive rates. Some providers – especially those using independent sales organisations (ISOs) – bundle fees in ways that are hard to understand. While providers may promote low rates, hidden charges can add up over time, significantly reducing your profit margins.
What to check:
- Review your monthly statement for hidden charges.
- Compare your rates with industry benchmarks.
- Ask your provider for a clear breakdown of fees.
💡 Tip: Transparent pricing is key. If your provider isn’t upfront about costs, it might be time to switch.
2. Slow Payouts That Disrupt Cash Flow 🚩
Do you have to wait days or even weeks to access your funds? Slow payouts can be a major problem, especially for businesses that rely on steady cash flow. 53% of merchants report delays in receiving payments, which can make it difficult to manage expenses and invest in growth.
What to check:
- How long does it take for your funds to be deposited?
- Are there additional charges for faster payouts?
- Does your provider offer next-day or same-day settlements?
💡 Tip: The best providers ensure payouts within 24–48 hours. Anything beyond that could be hurting your business.
3. Frequent Transaction Failures That Hurt Sales 🚩
Failed transactions can lead to frustrated customers and lost revenue. Studies show that 40% of businesses experience regular transaction failures, which can damage their reputation and impact sales.
What to check:
- Do customers report frequent payment issues?
- Does your provider explain why transactions fail?
- Can your provider handle high transaction volumes efficiently?
💡 Tip: A strong payment processor should have a high success rate and provide clear failure explanations to help resolve issues quickly.
4. Unreliable Support That Slows You Down 🚩
When payment issues arise, delays in getting help can cost you sales and damage customer trust. Some providers route you through endless automated systems or pass you between departments, wasting time and causing frustration.
What to check:
- How quickly are issues typically resolved?
- Can you speak to a real person without long wait times?
- Does the team understand your business and payment needs?
💡 Tip: Choose a provider known for fast, helpful, and personalised support – especially when things don’t go to plan.
5. Weak Fraud Detection and Chargeback Prevention 🚩
Fraud and chargebacks are among the most costly challenges in payment processing. A lack of proper fraud detection tools can expose your business to financial losses, regulatory penalties, and reputational damage. Chargebacks, in particular, can lead to increased fees, frozen funds, and even account termination if they occur too frequently.
What to check:
- Does your provider offer real-time fraud monitoring and automated risk alerts?
- Are there chargeback prevention tools such as dispute resolution assistance or chargeback alerts?
- Can you implement rules and filters to block suspicious transactions before they occur?
💡 Tip: A reliable payment provider should use machine learning-based fraud detection, provide real-time alerts, and have proactive chargeback management solutions to safeguard your business against financial losses.
Payment Processor Comparison: Industry Best Practices vs. Common Pitfalls
Not all payment processors operate in the same way. Some provide clear pricing, fast payouts, and dedicated support, while others bury fees in complex structures and offer minimal assistance when issues arise.
Here’s a comparison of best practices versus common pitfalls to help you assess where your provider stands:
Feature | Industry Best Practice | Common Pitfall |
Pricing | Transparent, competitive, no hidden fees | Complex pricing, hidden costs |
Payout Speed | 24-48 hours or based on risk level | Delay is based on risk level |
Customer Support | Dedicated account manager | Unresponsive, long wait times |
Transaction Success Rate | High authorisation rate with minimal declines | Frequent declines and failures |
Fraud and Chargeback | Real-time fraud detection, chargeback prevention tools | Weak fraud prevention, high chargeback risk |
By comparing your merchant account provider against these standards, you can quickly identify areas where you might be losing money or efficiency.
Is Your Payment Processor Working for You? Take This Quick Test
Still unsure if you need a better solution? A quick self-assessment can help. Answer these five key questions to evaluate whether your provider is supporting or hindering your business:
Question | Yes | No |
Are your processing fees clear and competitive? | ✅ | ❌ |
Do you receive payouts within 24–48 hours? | ✅ | ❌ |
Is your transaction failure rate below 15%? | ✅ | ❌ |
Can you speak to a real support agent quickly when issues arise? | ✅ | ❌ |
Does your provider meet the highest security standards? | ✅ | ❌ |
Do they offer you security and anti-fraud measures? | ✅ | ❌ |
If you answered “No” more than once, your current payment processor may be costing you more than you realise. It’s time to explore better options that prioritise efficiency, security, and cost-effectiveness.
Time to Reassess Your Payment Processing? Here’s What to Do Next
Your online credit card payment processing should support your business – not slow it down. If you’re dealing with high fees, slow payouts, or poor service, it’s time to explore better alternatives.
With the right payment partner, businesses can reduce costs, simplify transactions, and ensure they’re always getting the best possible terms. Take a moment to reassess your setup – you may find there’s a smarter way to handle payments.
Need help finding a better payment solution?