Merchant Survey: Merchant's express what they want most in a merchant account provider
An online survey was conducted by Vantage Card and the results were quite predictable. Rates came in as the most important element of a merchant account. 350 users voted for rates, which is about 26.6 percent of the 1316 voters. This is probably because merchant brokers tout their discount and retail processing rates so much. The misconception is that the processing rate is the most important cost element of a credit card processing solution. The reality is that you need to account for a combination of costs and each business is unique. Merchant banks will give custom quotes for merchants depending on their industry, years of operation, and average dollar amount per transaction. It is important to request quotes from several merchant account providers in order to get the best solution for your business.
Service takes second place but almost ties with Incentives Service came in second with about 18.6% of the votes. Why do you need good service from your merchant account provider? For one thing, if there is any problem with chargebacks, disputes, or other sticky situations, you want a merchant account provider who will work with you and not be a merciless tyrant.
Incentives make a difference
Some merchants give rebates, or offer a reward program by giving merchants points for each transaction processed. The merchant can then use those points for gas cards, gift cards, merchandise and more. Apparently incentives are important to merchants as it received 18.4% of the votes.
Terms are ranked the lowest in importance: 17.1%
Terms are extremely important but too many merchants ignore them. It is always worth it to read through every page of the terms and conditions. The fine print is the real legal contract and you better know what you're getting into before you finalize the deal. Examples of unwanted terms that merchant providers sneak into contracts include volume limits, delaying transfer of funds from the merchant account to the merchant's bank account, and freezing funds in the case of too many chargebacks. When a company exceeds the volume limit of the merchant account provider, the provider instantly halts their credit card processing even though the merchant has customers attempting to make purchases. This is the ultimate evil in merchant accounts because the merchant loses credibility and sales all at the same time.
Avoid these pitfalls when choosing a merchant account If the merchant account provider charges the same rates for MasterCard and Visa, you're being overcharged or they're hiding charges. You're also probably paying too much if the merchant broker only gives you one qualified rate or only offers mid and non qualified rates. Anytime you lease credit card terminal equipment from the merchant account provider, you're getting a bad deal. In a matter of months you'll end up paying more than if you'd have purchased the equipment outright.
Long term contracts with early termination fees also smell of a bad deal. Once you are locked into the contract, you may find yourself stuck with rates that are higher than quoted, poor customer service, and delayed funding. Remember that the Interchange is not controlled by any one company so there is no guarantee that the Interchange rates will stay the same.
Hidden fees can also blindside you if you didn't read all the fine print and legal terms. There is almost no limit to how many fees merchant account providers can charge. Try to stick with merchant account providers who don't have long term contracts and early termination fees. Watch out for yearly fees, equipment fees, gateway fees, statement fees, security and fraud prevention fees, and transaction fees.
