Merchant Accounts Article RSS Feed
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Merchant Accounts Articles |
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Shopping for or comparing merchant accounts is a task that many business owners dread. The pricing is confusing, the sales pressure is intense and every provider promises to offer the lowest rates and fees. Luckily, there are two fundamental things that you can do to cut through the fog and ensure you're paying as little as possible to processing credit cards. Credit card processing is one of the greatest expenses that a business has. Consumer related businesses are especially affected by processing charges. That's why it's so important to have a low cost processing solution, and why it's so unusual that many people shop for and compare credit card processors with a backwards approach. Over the years the merchant processing industry has done a phenomenal job training merchants to look at insignificant details when they compare merchant accounts. Even on an otherwise transparent pricing structure like interchange plus, providers are able to squeeze substantial profits from an account that appears on the surface to be inexpensive. The interchange plus merchant account pricing model is quickly becoming the most sought after form of pricing for businesses seeking the best merchant account. It's often touted as the only truly transparent way to process credit cards. While this may be true, it doesn't tell the whole story. If you're processing credit cards on a tiered merchant account pricing model, inconsistent buckets are a vital subject for you to understand. The term inconsistent buckets is used to refer to a merchant service provider's ability to dictate at which tier an interchange category is charged on a tiered merchant account pricing model. With all of the information floating around about credit card processing, it's often hard to tell what's true and what's not. Being misinformed about credit card processing can be a costly oversight. Common misconceptions about merchant accounts can lead to costly mistakes. Expert Author: Hiren K Modi | Summary Those involved in credit card processing do a brisk and lucrative business, regardless of the state of the economy. They are an essential link in the transaction chain that connects buyer to merchant, via the issuing and acquiring banks involved. If you've ever asked a merchant account salesperson what their rate is, you asked exactly what they wanted to hear, and you're probably overpaying for credit card processing services just like the majority of businesses. "What's your rate?" is the most often asked question by merchants when they're looking for the best merchant account - but it's the wrong question to ask. If you're like most people, you don't give too much thought to the process of issuing refunds to your customers for credit card purchases. After all, it's a pretty easy process - just swipe their card through your machine and follow the steps to initiate a return of their purchase. The funds will be credited back to your customer and you'll be issued a refund for the original processing charges, right? Taking five minutes to clean the magnetic strip reader on your credit card processing machine can save you big on processing charges each month. The magnetic strip on the back of a credit or debit card holds information about the cardholder that a credit card machine reads when the card is swiped through its reader. This article covers four tips to help you lower your merchant account processing fees. Even if a single one of these tips applies to your situation, you may be able to cut your processing expenses substantially. There are many incentives to start accepting credit cards as a form of payment for the products and services that your business offers. The benefits of accepting credit cards almost always outweigh the risks, and the chances of this are greatly improved if you do your homework before opening a merchant account. In this article I'll talk about the importance of accepting credit cards, what to expect as you compare merchant accounts and how to keep your merchant account in good standing once you begin processing. An extremely important but seldom talked about topic regarding credit card processing is that of merchant account holds. One of the most financially devastating things that can happen to a business is for a processing bank to freeze its merchant account. If this happens to your merchant account, you won't be able to access the account and your funds from open authorizations will be held without deposit for an undisclosed period of time. The terms "basis point" in reference to credit card processing and merchant accounts is used to refer to the percentage of a sale that a business pays their service provider to processing a credit card transactions. Basis points sound a lot more complicated than they really are. Simply put, the basis points are 1/100th of 1 percent or 0.01 per cent and they're used specifically when referring to the discount rate that a merchant pays to process credit cards. Anyone that's had to deal with merchant accounts and credit card processing will tell you that the subject can get pretty confusing. There's a lot to know when looking for new merchant processing services or when you're trying to decipher an account that you already have. You've got to consider discount fees, qualification rates, interchange, authorization fees and more. The list of potential charges seems to go on and on. Not for profit businesses are often able to receive discounted pricing for many business services because of their legal structure. However, most merchant service providers don't give non-profit merchant accounts special consideration. The news isn't all bad, though. If you're a non-profit business looking for credit card processing, you can get low rates and fees by finding a niche provider or by using your company's legal structure as bargaining power. Expert Author: Johnathan Hewitt | Summary 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. Expert Author: Johnathan Hewitt | Summary Businesses primarily cancel their merchant account because they no longer need to accept credit cards or because they're switching to a different provider that has offered them lower rates and fees. When an account is cancelled because a business no longer needs to accept credit cards, it usually means that the business is being dissolved and there's no reason to have an account at all. However, cancelling a merchant account to switch to another provider that promises lower rates may be more trouble than it's worth – literally. Expert Author: Johnathan Hewitt | Summary The most diligent business people will do their homework when shopping for a merchant account. They'll get multiple processing quotes from different providers and negotiate the lowest rates to get what seems to be the least expensive processing solution. Expert Author: Johnathan Hewitt | Summary Improperly deducting credit card processing fees paid on sales tax at year-end can be a costly mistake. Sales tax can have a significant impact on merchant account fees that many merchants who do their own business taxes fail to consider. Card-present merchants that pay tax on the majority of their credit card transactions can be particularly affected by this issue.
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