Wednesday, January 31st, 2018
The rising demand for merchant accounts has led to the surfacing of more service providers in the industry. You now have a long list of vendors to pick from when the time comes to choose one. But why would you opt for one account issuer over the other? What are the factors to look into when making your merchant account comparison?
Every merchant processor pays a fee – known as interchange rate – to the governing board of card issuers. The cost varies, most times depending on the merchant and types of transactions they process. It could fall anywhere between 1.48% and 2.95%. If your processor quotes something as low as 1.43%, then they may be lying to attract you. In reality, they usually attach several other fees to credit card processing.
The true cost of taking credit card payments is a chain of difficult calculations that at times defy logic. Often, the type of business you run influences cost; e.g., retail stores pay lesser than restaurants. The volume of transactions also impacts the total fee; high-volume transactions mean a lower charge. There’s a payable fee for every sale. Plus; statement fees, chargeback costs, setup charges, equipment, charge-back, monthly maintenance among other miscellaneous costs all factor into the average value.
Picking a Provider
While major banks may not necessarily offer the cheapest rates, they are more trustworthy financial partners. But again, you won’t meet their criteria if your business is high risk. Luckily, more and more high-risk merchant service providers are joining the market to ease the account acquisition process. Best Payment Providers is one such merchant service specialist. Therefore, when choosing someone to work with, always make an effort to compare the rates across all vendors.
Because you’re new to this whole merchant account thing, a little orientation and assistance will be of help. You don’t to sign a contract with a company that doesn’t care about what happens to you after you strike the deal.
Most providers sell or lease processing equipment to merchants. For in-store use, you’ll need one, so you can swipe cards and avoid the extra cost of “keying in” each transaction. However, you get to own the equipment after lease or purchase. Most companies also lack a repair/replacement program, so if yours wears out, you spend on a new one. Therefore if you must have this equipment in your store, look for a processor who’ll rent it to your business.
Because customers expect to use their cards, make sure your business is ready to take credit card payments. Failure to provide this alternative payment method means you’ll lose customers who don’t carry liquid money and would like to pay for your service or buy your items and using their credit cards. That’s why you need a partner that will give premium services without ripping you off.