Merchant Account Pricing

Next on our list of factors to consider is price.  You certainly don't want to pay too much for a merchant account.  Sure merchant service providers have to make a living, but some nickel and dime merchants to death.  This is simply unacceptable.

Here are some questions to ask merchant account providers in regards to pricing:

• Are your rates introductory or fixed?

Some merchant account providers will try to give you really super rates up front, then as the months go by they'll slowly increase your processing fees.  Make sure rates are fixed and not introductory.

• Are you willing to put all your rates and fees in writing?

Make sure their paperwork shows ALL rates and fees you will have to pay.  They should never keep this information from you, ever.

• What are your hidden fees?

Almost all providers have hidden fees, some don't.  Again, make sure those fees not mentioned on their website are in posted in writing.

• Do you impose a cancellation fee if I decide to move to another provider?

If the provider is more interested in your business, rather then themselves, they won't impose any cancellation fee.  However, not every company sees it that way.  Look over their agreement and ask them to be on the safe side.

• Do you require a reserve to be setup?

A reserve is when a provider will hold on to part of your credit card earnings each month, and eventually release them later.  This should be avoided if all possible.  A reserve is usually only required for companies who plan on process very high volume per month (approx. $100,000 and up).  A reserve may also be put into place if your credit is bad.

• What are the fees for Discover and American Express?  Are their setup fees?

Discover and American Express impose their own fees.  They are usually on a sliding scale and are based on what your company sells and projected sales volume.  At last check, Discover does charge a nominal setup fee.

• What are the pass-through fees?

Pass-through fees are usually tiered as follows:  Qualified, Partially Qualified, and Non-Qualified.  In most cases, your transactions should fall under Qualified.  Partially Qualified and Non-Qualified usually apply in cases where you are processing Corporate credit cards and are not using AVS (not suggested, however if you accept orders outside of the USA, there is no AVS system in place and your transaction fees will be higher.)

Top 3 Merchant Account Pitfalls REVEALED! Avoid the mistakes many people make when choosing a merchant account provider for their business.  Learning this information ahead of time will save you time and money both in the short and long term. Avoiding merchant account pitfalls