MERCHANT ACCOUNT SECRETS REVEALED – ONLINE SERIES – PART 5
So now we come to one of the single most important factors affecting your payment processing fees. Who will you choose to process with? If you are only concerned about a super low discount rate, then you might choose whoever is willing to go low. However, many business owners have gone this route later to regret their decision. The next time an agent hands you a merchant account application, why not request to read the fine print first? We have always heard the advice, “Read the contract before you sign anything!” Yet in practice, this is rarely done. In fact, some providers will mail the contract terms after you sign up with them. If the agent doesn’t have a copy of the agreement, you can likely download one from a provider’s website or mailed to you beforehand. By reading the contract, you can learn much about the rates you will pay, how transactions downgrade, as well as any additional service fees you might pay. Even promises of a low discount rate may be weighed down with various service fees attached or restrictions that will apply, and you will find it isn’t a good deal after all. Another company offering a slightly higher discount rate might be a better choice. Do the math and you will be able to determine what the best way to go is.
Also, determine if there are any cancellation fees or early termination fees. Are there any application fees or additional startup costs that need to be considered? With regard to the contract terms, many companies are now offering month-to-month contracts. This is a good way to try out a company. But have you ever considered why they need to offer a month-to-month contract instead of a two, or three-year one? It could be that they are just trying to accommodate the merchants who refuse to be under contract for any length of time, but it could also mean that the provider understands that the service they offer is less than exceptional. Since it is month-to-month go ahead and try them out anyway. They might just provide the best service you have ever seen.
Another way to determine if the merchant account provider is worth considering is to look at their website. I do not mean the sales agent's site, but I mean the processor’s site. Is it up-to-date? Does the site indicate that the company cares about its image? You can learn how long the company has been in business, their approval rating, and also see customer service documentation and business hours. Does the company advertise online reporting for customers who have signed up? These services are practically standard and if a company doesn’t have it, then stay clear as they have not kept abreast with the industry standard. It makes me wonder where else they are falling behind. Of course, glancing at the sales agent’s site is a good idea as well, but not as important.
Once you locate their customer service numbers from the website, pick up the phone and give them a call. Do they pick up or send you to voice mail? If you get voice mail, leave a message like, “This is so and so and I need to send the merchant application and want to verify the fax number to send it to...” If no one calls you back, this might indicate a communication breakdown. If you do get someone who answers the phone, how do they speak to you? How proficient do they sound? Ask them how long they have been with the company and if they like working there. Hesitating to answer your questions or feeling unsure speaks volumes about who you are planning to process with.
The last thing you need to determine when choosing a provider is whether you require equipment or already have your own. If you need equipment, make sure you do not sign anything that looks like a lease. Do not sign anything that indicates a monthly payment attached to a term of three or four years! Usually, you will see something like an additional $24.99 to $49.99 per month. Watch out! This is a lease! Some agents will tell the prospective customer that you just have to pay this while you have the equipment and once you are done processing with that company, simply return the terminal and you will not have to pay the monthly fee. Others will say this is only a monthly service fee. This is not true and once you have signed the paperwork you are locked in. Worse still is the fact that the lease company is different than the processor that signed you up. So once you’ve signed up, don’t think that your processor is going to help. The provider is not interested in disputing what you signed with the lease company. They will simply give you a phone number to contact the lease company and resolve the problem yourself. You are on your own. Just take my advice and buy a terminal outright or get a free terminal placement from the merchant account provider or sales agent. Most companies are now offering this, so you should be able to get a reliable terminal loaned to you while you process with the company.
The thing to keep in mind is there are often increases to your payment processing fees, monthly minimums, or annual fees in order to qualify for a free terminal placement. If this is unacceptable to you, then search the web for a terminal that fits your needs and budget. If you do purchase a terminal, make sure that it is PCI PED compliant. Otherwise, you will be stuck with an out-of-date terminal that cannot be programmed by the processor. On the bright side, you now have the fanciest paperweight around.
One more note of caution regarding a free terminal placement: Find out what the processor’s policy is in the event that the placement terminal breaks or is otherwise inoperable. If you find out that the only way to get a new free placement is by returning the broken one first, you will not be able to process cards easily for many days (In fact, unless you have a backup terminal, you will have to telephone in all your transactions until your new one arrives! It isn’t cheap.) Find out if there are any costs for shipping, how fast the new terminal is shipped out, and what technical procedures are required before you are allowed to return broken equipment. By finding out in advance, you could save yourself from a nightmare later on.
Choosing the right merchant account provider is one of the most important decisions you can make to get the best processing statement fees. By carefully considering the factors discussed in this article, you can avoid common pitfalls and find a provider that offers you the best possible rates, terms, and service.
HOW TO GET THE BEST PROCESSING STATEMENT FEES
Read the merchant account contract carefully before signing it. This will help you understand the rates, fees, and other terms of your agreement
Be wary of providers that offer extremely low discount rates. These rates may be offset by hidden fees or restrictions.
Consider the provider's website and customer service reputation. A well-designed website and responsive customer service team are signs of a reputable company.
Avoid signing a lease for merchant account equipment. Instead, buy a terminal outright or get a free placement from the provider.
If you get a free terminal placement, find out the provider's policy for replacing broken or inoperable equipment.
By following these tips, you can choose a merchant account provider that will help you save money and grow your business. TO BE CONTINUED IN PART 6