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June 17, 2024
by David Goodale

Ask for References When Finding a Payment Processor

(Slightly edited from video transcript for greater readability)

Key Takeaways

Seek References to Ensure Reliability
When choosing a payment processor, it's crucial to ask for references from businesses similar to your own. This helps verify the processor's reliability and service quality, ensuring you make an informed decision.
Evaluate Support and Responsiveness
Contact the references and ask about their experiences with support and problem resolution. Understanding how quickly and effectively the processor addresses issues can help you gauge their customer service.
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Hello, David here at Today I have a pretty good tip. It's not complicated, but it's something many merchants don't do. Today I will discuss getting references, which is something more merchants should do when choosing a payment processor. Stay tuned, we'll begin in just one second.

get references

Advice for larger merchants or long-term contracts

I have to start by saying that this advice is more for larger merchants or merchants considering a longer-term contract. For smaller merchants, there's nothing wrong with asking for references, but of course, there is less risk involved and there's only so much time they can spend tracking down and getting references.

Now, as far as the issue goes though, the issue when you're selecting a payment processor or any service provider is that it's a long-term partnership. In the case of e-commerce, it also involves changes to your website because you're technically integrating your transactions into the payment processor's website.

Why is it then that more businesses don't ask for references? This is something that I would do for any important business decision, but to some extent, you can use, Google reviews to get general feedback about the service provider. Still, how much can you trust the internet?

The problem of course, with getting or asking for references is you're almost certainly going to get someone the salesperson knows well and is going to give them a glowing positive review. They're not going to give you a reference from three years ago where they butted heads with somebody.

However, if we're just brainstorming, an idea might be to find an old Google review and reach out to that company because you can sometimes see who they are, see if they're still working with that processor, and how their experience was. That is one way to track down a reference on your own.

When you get on the phone with them, you might want to ask questions similar to these. How long does it take to get your money? How often were you funded? What was the last problem that you ran into that you can remember? If you have a question or a problem, who do you go to? How long does it usually take to get an answer? You don't want to burn through this person's time. What you're looking for are some specifics to the answers so that it makes it obvious that they're not just making it up. If they can give an actual example that sounds real, like they're telling you about something that happened, then it gives you confidence to know that there's some substance to this story.

get references

An example from the Payment Processor perspective

Now, choosing a payment processor is an important choice, and if somebody asks me for a reference, I generally am very happy to provide it. I do want to provide an example on the other side of the coin just so you understand it.

A long time ago, I had a small merchant apply. I think they did about $15,000 per month in sales. They had asked for a reference and I have just won a contract for a very large and well-known travel company. I had quite a senior contact there. He had just said that he'd be happy to give me a reference.

This is where I made a mistake. It turns out that she got in touch and asked some questions and he wrote a glowing reference letter. I got a copy of it later when he sent it to me. It was long and detailed as if it were a corporate RFP (Request For Proposal), and he came out swinging for the fence on my behalf with that reference. I couldn't believe the time that he spent on that or that he did that for me. It was much more than I was expecting.

However, after that, I didn't hear from the merchant. After a week or two I followed up via phone and she said, "Oh, I went with another processor, they offered me something better." I had already quoted her a very low rate. The rate she got couldn't have been meaningfully better, not especially at 15 basis points. It means she got a call from a call center person or someone who promised her what she wanted to hear and it's fine. She arguably may have made the wrong choice and I'm certainly not upset about that.

What I am upset about is in hindsight, I connected a small merchant with a very large corporation that put so much work in. She asked for a reference and then just ended up going with what sounded good.

That was a mistake that I made. When people ask us for references, I connect them with businesses of a similar size. If you're a small merchant, don't ask to be connected to Elon Musk. It's probably not going to happen. But that being said, there is nothing wrong with asking for references. It's important and I just don't know why more merchants don't do it. It's not as big of a mistake as signing a huge contract. Getting locked into a contract can still be a good deal without a reference, but I think it should be part of your due diligence.


I think I've gone on long enough. I think I've made a compelling argument for why you should. If you ever do need payment processing, please reach out to us at We'd be happy to give you a quote or just take a look at your statements. Other than that, thank you for watching. Have a nice day there. Bye now.

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David Goodale About the Author

My name is David Goodale, CEO at Merchant I launched our business in 2001 and have over 20 years of expertise in the field of online payments. If you have a payments related question or project, and especially if it relates to multi-currency or international e-commerce don't hesitate to contact me. I'm always happy to help with an honest opinion, and enjoy chatting with folks from interesting businesses.

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