Over the past several years many credit card processing calculators that estimate a business's monthly processing costs in an attempt to make the task of comparing merchant accounts transparent have popped up on various web sites. A credit card processing calculator sounds like a useful tool at first, but the reality of creating one that's accurate is another story.
As I'll explain later, the nature of credit card processing rates and fees make the logistical obstacles of creating an accurate calculator prohibitive if not completely restrictive. Even with an interchange-plus pricing schedule, results can be far from the mark. Most rate calculators are nothing more than a marketing gimmick that should be dismissed as half-hearted attempt at finding a silver bullet to summarize merchant account rates. However, newer more comprehensive calculators are showing some promise and they have their place in a merchant's arsenal of tools to use when comparing merchant accounts, but it's still a relatively small place at that.
The largest obstacle on the road to creating an accurate calculator is predicting into which of the hundreds of different interchange fee categories an individual transaction will qualify. The criteria used to determine qualification is equally illusive. This guessing game is difficult enough on an interchange-plus pricing schedule and inconsistent buckets make the task virtually impossible when calculating fees on a tiered merchant account fee schedule.
For example, a detail as minor as the speed at which a credit card is swiped can cause an electronic card reader to miss track data causing the transaction to downgrade. The number of different credit cards consumers use is another issue. In the best case scenario, a merchant that's fluent on the subject of interchange couldn't glanced at every card that they accept in a given month and categorize it as CPS/rewards 1, commercial level II, etc. These are just two of an endless array of variables that stand in the way of calculating interchange qualification on individual
Nevertheless, the calculators press on... In an effort to guess which interchange categories will most often apply to a particular merchant's transactions, calculators ask merchants probing questions about processing volume, average ticket size, the type of credit cards being accepted and various other questions in the hopes of creating a general processing profile. Of course, the accuracy of these numbers is based on the assumption that the merchant understand what they're being asked and that they have accurate figures to provide if they do.
Assuming we get this far while still maintaining some degree of accuracy, the issue of peripheral account details still needs to be addressed. Most calculators avoid this gray area completely because the subjective nature of these features won't fit into a web site form field. A calculator relies on one-dimensional variables to try and guess a merchant's processing costs. It can't examine a merchant's needs and make money-saving recommendations, or read a merchant service agreement and inform the merchant that they're about to sign a 3-year contract that auto-renews itself unless it's cancelled in a thirty-day window.
Another important point along these lines is that calculators guess at processing costs on an objective black and white level without regard for the aspect of a merchant account that can greatly affect the interpreted cost such as customer service or getting a merchant set up with the best solution.
Merchant accounts are far too important not be considered and compared in aggregate, and credit card processing calculators fail miserably when it comes to looking at the big picture.
New calculators are bound to hit the market periodically, as they have been for so many years, and we'll be sure to update this article as new and potentially promising calculators come to our attention.
Listed below are more articles related to the above article from the "Merchant Accounts" article category.
People interested in the above article "Credit Card Processing Calculator" 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.
