Merchant Services: How do you know you’re getting a good deal?
Merchants are often frustrated with the expense of their Merchant Services to accept credit cards. With thousands of credit card processing salespeople promoting the “best” rates, offering “free” equipment, and providing huge promises that all to often fall short of expectations. The big question often is:
How do you know if you are getting a good deal on your merchant services?
Merchant services credit card processing as an industry is incredibly complex and can takes years to learn and even more to truly understand. Business owners not only do not have time to learn but should not need to understand the intricacies of what it takes and costs to accept credit cards. So to break it down to the bare essentials allowing you to quickly understand what you need to know so that you can decide if you are getting a good deal on your merchant services lets look at 3 main areas:
First off Credit Card Processing Rates
The first and most crucial thing to understand is that your business must be set up with Interchange plus pricing to accept credit cards efficiently and affordably. We have covered this in detail previously but suffice to say that interchange plus is the ONLY way to actually know what you are paying for with your merchant services. It is also the only way to able to compare merchant services providers. Do not allow your business to settle for any other pricing format. A good interchange plus pricing rate would be anything under 25 basis points (or .25%) and .15 cents/transaction. If this is the rate you are offered you should be able to negotiate a free credit card machine or secure gateway. If your credit card volume is more than $7000/month in Visa MasterCard sales then negotiate NO free equipment and ask for rates more like Interchange Plus 15 basis points (.15%) and .10 cents/transaction or less.
Merchant Services Fees
Merchant services providers (credit card processors) constantly look for creative fees to charge in addition to their “Low” rates to accept credit cards. For most standard retail brick and mortar merchant services accounts the only monthly fee in addition to your credit card processing rates that should be acceptable is a monthly statement fee of $7 a month or less. If you accept credit cards on line, wirelessly, or are using a POS system there may be “pass through” fees from that third party provider. Make sure that if this is the case that those fees are explained to you so that be sure there are not additional unnecessary fees.
On an annual basis you can expect to be held responsible for your annual PCI Compliance validation. PCI Compliance validation is a mandatory requirement for anyone who wants to accept credit cards. For the vast majority of small business owners this expense should be less than $125 annually.
When it comes to setting up your new merchant services account aside from any equipment purchases you should not have to pay any set up or programming fees.
Merchant services support
Most business owners just want the least expensive credit card processing rates and neglect to consider their service needs. If something goes wrong with your ability to accept credit cards it can effectively shut your business down. In this case you need to know that you have reliable, friendly, and expert service to get you back up and accepting credit card payments. All too often merchants are just handed a 800 number and a handshake. This may not be acceptable make sure to ask if the customer service staff is in house. Many times merchant services providers will count on call 24/7 centers that are outsourced to other countries with seemingly endless hold times. An in house service center has a more vested interest in providing you with swift and courteous service. In addition to a dependable service center having a direct contact with your representative can be a huge asset to your business.
If your business’ merchant services fall within these criteria then you can confidently look the next slick sales agent that walks through your door and tell them that you are not only confident that you are getting a good deal but that you are happy with your current merchant services provider!
If your business could benefit from making a change then the Merchant Doctor would love to earn your business. The Merchant Doctor offers all of its clients low Interchange Plus pricing (15 basis points and .08 cents/transaction), no unnecessary fees, and in house service.
We welcome your comments and questions.