As more businesses go cashless and more customers rely on credit cards to make purchases, those trying to scam business owners to make money is on the rise. According to Business.com there are several credit card processing scams that businesses need to watch out for.
Low-risk wholesale processing
This common processing scam usually comes in the form of an unsolicited offer indicating your business has been deemed low risk and therefore you qualify for wholesale processing. However, the term wholesale processing is extremely vague. In addition, there are no lists kept by credit card companies like Visa or Mastercard of low-risk businesses so this scam is based on false information.
Offer for Negotiated Lower Rates
In a similar type of scam, a credit card processing company, unsolicited, may contact the business owner and tell them they have secured lower processing rates for their business and will pass on the savings to them if they sign up with the processor. The only issue is that unless you have 82 million transactions and $5 billion in sales you cannot qualify for lower interchange rates. Therefore, this scam is also based on false promises.
As the previous two examples of scams show, there are certain red flags that business owners need to look out for when choosing a credit card processors. The most common red flag is unsolicited offers, especially when those offers appear too good to be true. Another red flag is when credit card processors offer you a “deal” that is only specific to your company or business as unless your processing millions of transactions your company would not be singled out for special processing fees.
In order to avoid credit card processing scams or shady sales tactics, it is important to go with a credit card processor that you can trust because they have a stellar reputation and are upfront about costs and fees.