Article Sphere Logo
Merchant Accounts Article

5 Costly Merchant Account Myths

By Expert Author: Ben Dwyer
Word Count: 521 words | Views: 959 view(s)
Mid and non-qualified surcharges are standard
Tiered merchant account pricing has become so widespread that most businesses don't know that there are other less expensive pricing options. Mid and non-qualified surcharges account for the vast majority of processing costs for any business that has a tiered merchant account pricing structure, but it doesn't have to be that way. Switching from a tiered to an interchange plus or flat rate merchant account pricing model will eliminate the expensive mid and non-qualified surcharges and downgrades.

All merchant accounts have a contract and cancellation fee
Not all merchant accounts have long term contracts and cancellation fees. In fact, increased competition in the credit card processing industry has given way to a trend away from requiring cancellation fees. Even those merchant service providers that initially require contract terms and cancellation fees will quickly waive them if it means earning a new merchant's business.

Merchant account contracts guarantee rates and fees
There are no benefits to locking yourself into a long term contract and cancelation fee. Contracts do not guarantee rates and fees for the length of the agreement. Visa and MasterCard have the ability to raise interchange reimbursement fees twice a year in April and October. Interchange reimbursement fees are the benchmark by which all credit card processing charges are figured. If interchange fees change, so too will your processing fees - regardless of whether you're in a long term contract with your merchant service provider.

Your local bank has the best rates
Many business people turn to their bank when they need financial services, and it seems only natural that a bank would be able to offer the lowest rates and fees for credit card processing. However, this often is not the case. Smaller banks usually outsource their processing services to a larger institution that specializes in electronic bankcard processing - called an Acquirer. By getting merchant services from a smaller bank that outsources the processing services, you're essentially adding a middleman to the mix and increasing final costs.

However, larger banks that act as their own Acquirer are able to offer competitive rates and fees on processing services. Especially when offered as a package with other banking products such as checking and savings accounts, merchant account rates and fees through larger banks can be very competitive.

Leasing/Renting credit card machines is cheaper than purchasing them
Never rent or lease a credit card processing machine. If you do, you will end up paying ten times what the machine is worth by the end of the rental or leasing period and the machine still may not belong to you.

There was a time when credit card processing equipment was quite expensive and leasing or renting it made financial sense. Those days are long gone, and a terminal that will rent or lease for $30 a month over three years can be purchased new for under $200 with a new merchant account.

Credit card processing equipment will always be less expensive when it's purchased while opening a new merchant account. However, even though equipment is more expensive when purchased without opening a new merchant account. It's still less expensive to buy it than to rent or lease it.
Ben Dwyer

About the Author:

This article for businesses that will start accepting credit cards and more helpful information on to secure a cheap merchant account is available at MerchantCouncil.

Article Source: http://www.articlesphere.com/Article/5-Costly-Merchant-Account-Myths/188457

 This Article has been viewed 959 times.
  

Related Videos



 

Related Articles

 
 

Listed below are more articles related to the above article from the "Merchant Accounts" article category.

People interested in the above article "5 Costly Merchant Account Myths" are also interested in the related articles listed below:

 
Increasing popularity of pass through merchant account pricing formats has caused confusion with a common industry term that is making it tougher to compare merchant account quotes. If you're like most people, you compare merchant accounts by asking prospective providers for their rates and fees. Until recently this approach worked just fine. But the increasing number of providers that are offering interchange plus pricing has made this question tougher to answer. And the reason lies in how charges are determined on different pricing formats.
Some merchant account pricing structures are much more cost-effective than others, but some of the cost-saving aspects of the best merchant account price models aren't readily apparent. Knowing which price models are best, and how to utilize them to keep costs low can help you save hundreds of dollars a month in credit card processing fees.
Most every company in America today uses some sort of merchant credit card processing services. This means having to pay a fee every time a customer uses a credit card to purchase your goods or services. This fee is something which has caused a lot of consternation for business owners. They do not like the idea of losing money every time they make a sale. They long for the good old days when most people paid in cash. This is because when they made a cash sale, they received 100 per cent of the income. Now they receive more like 98 per cent of the sale because they have to pay 2 per cent to credit card processing companies. What many businesses fail to realize is just what they will lose if t
We've put together the following ten questions to ask prospective merchant service providers to help you avoid some of the largest pitfalls that face businesses as they're in the market to get a merchant account.
If you knew that a Canada Internet merchant account could dramatically improve profits and reduce overhead costs, would you get one? Well, the good news is that it can and you should! A merchant account conveys a host of benefits that can help your business expand to meet the demands of today's time-conscious consumers. To apply for your merchant services account, simply follow the following easy steps.
A Fast Merchant Account is waiting to usher your business into the technology age! All you need to do is choose a lender that will work with your company and then enjoy the benefits of a fast merchant account. Here are some of the ways in which your company can advance with the help of a merchant services account...
A merchant account for restaurant owners may be just the thing to help your business grow. If you have experimented with several marketing techniques and feel that you are ready to venture into e-commerce, this might be the venue you need to help your business really take off and start bringing in high-level profits.
Article Directory Home All Categories Business Merchant Accounts 5 Costly Merchant Account Myths
 

Can't find what you're looking for? Try Google Search!
 
Copyright © 2005 - by Larry Lim, Singapore - Article Search Engine Directory at ArticleSphere.com™
All Rights Reserved Worldwide. All Trademarks and Servicemarks are the property of the respective owners.