What Does a Great Rate Cost You?

When you are looking for the right merchant account for your business, what does a great rate cost you?

There are three primary types of merchant accounts and some offer incredibly low rates. As we have been sharing with you, the rate, however, doesn’t reflect the full cost of credit card processing.

1. Warehouse style (like Cayan, Vantiv – formerly Mercury)
2. Flat rate/aggregate account management (like Square, Stripe, PayPal)
3. Boutique (like TransAct)
4. Banks (who process their own or partner with a merchant company like those listed above)

With all of these there are things to consider besides pricing and service. Look also at the industries they typically serve – do they know your business?
Can they change policy terms (or, in other words, change or edit the contract)?
Are there exit fees? Is their equipment proprietary?

We recently helped a new client convert from a warehouse program provider who was planning on waiting out a contract term because they would have to pay $600.00 to exit in addition to changing their equipment which wasn’t even three years old.

After the first 4 months we were able to save them money on processing fees even after paying for new equipment and the exit fee – they were so happy they decided to leave and terminate their overly expensive contract…but they offered a great rate…

Please be sure to consider more than just a great rate.
• Ask if there is a contract, monthly minimums and/or quarterly billing fees
• Verify if there is an exit or cancellation fee

    – if the answer is “no” ask them to show where it is in the contract language?
    – is it written in the agreement you signed?

• Ask if you have equipment options or if you can buy it on your own and why you can’t use your existing equipment
• Don’t settle. Ask questions. Remember that this is a financial decision and impacts your business’ bottom line.

Many business owners review their income and expenses at the end of the year, but I would encourage you to look at processing fees each month to be aware of what it is costing you. Then, ask your provider if your fees are much different than the great low rate they offered you to sign up.

~ Mary Ann