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.
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.
Complex rates and fees and obscure merchant account pricing contribute a great deal to the healthy skepticism that merchants feel toward the credit card processors. But one of the greatest contributors, for which there is little justification, is the outrageous practice of leasing credit card equipment used throughout the industry.
When shopping for the best merchant account, you're really looking the lowest markup over base costs. There are true costs associated with credit card processing that merchant service providers can't control. Think of credit card processing as a tangible product for a moment. Like with any product, there are costs to bring it to market that aren't negotiable at the retail level. The only aspect of price that is negotiable is the markup over wholesale. This same model applies to credit card processing services.
An online search for merchant accounts through your favorite search engine will produce countless results from merchant service providers promising retail rates as low as 1.39 per cent and e-commerce rates as low as 1.99 per cent. You know the ads, the ones that "guarantee the lowest rates and fees". Aside from the fact that these rates seem too good to be true, doesn't it seem kind of that every provider can guarantee lowest merchant account rates?
When it comes to credit card processing and paying interchange fees - the more you make, the more you pay. But when it comes to the rates and fees that you pay to your merchant account provider, this is not always the case. Tiered, enhanced recover reduced (ERR) and interchange plus pricing are all volume based pricing models, but flat fee merchant account pricing is not.
Businesses that accept credit cards feel the pinch when Visa and MasterCard raise their interchange fees, but some are affected more than others. Depending on which type of pricing structure your merchant account utilizes, you may be paying a lot more than you think when interchange fees are increased.
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.
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.
