Discounting the discount rate

How important are processing rates? This is a trickier question than you'd think. There are many merchant account providers who will advertise a low processing rate and then lock you into a long term contract with high merchant fees for early termination. They will make up the difference by charging high equipment lease rates, statement fees, gateway fees, or per transaction fees.

Eat a balanced meal of fees

Rather than shop by the processing rate alone, a full analysis of the complete fee structure is necessary. Don't forget to take into account your average monthly volume. It is wise to get out a calculator and run a “What if?” scenario to see exactly how much you'd spend each month with the various merchant accounts you're considering. Also, take into account tiered rate structures for qualified, mid-qualified and non-qualified pricing. You'll need to know what percentage of your monthly transactions fit into each of these categories in order to make an accurate estimate of the total fees the merchant account provider would charge you.