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Which would you prefer to do? Spend a bunch
of money accepting credit cards through a great merchant account - or
spend significantly less for a fantastic merchant account that boasts
identical features and services?
Well, unless you have recently had a serious blow to the head, I am sure
you would rather pay less for the identical features. Any sane person
would agree. Unfortunately, in the merchant industry, it is not always
as easy as comparing "A" to "B". There are a plethora of diverse billing
structures, charges, and fees that make it very difficult to understand
just how one service stands up to another.
So why don't we see how to find, compare and choose the ideal merchant
account for your unique small business...To start with, you have to
locate a minimum of 3 separate financial institutions - these could
include a bank or credit union who can sign you up for their merchant
account. Also, you should locate different merchant providers by
utilizing Internet search tools that provide particular benefits. There
is a standard approval procedure that both the banks and the merchant
services use. |
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The
following information will be required in order to process your
application: 1. A business plan
that is feasible,
2. A credit history free of significant blemishes, and
3. Proof that you are able to pay (and have to ability to continue to
pay) the charges related to a merchant account.
It of great benefit to you to research the ins and outs of the fee
structure charged by each of your potential merchant services companies
and/or banks that supply merchant accounts. There are many providers who
fail to fully disclose their terms and conditions until you actually
sign up for the account - so you might need to ask them for a copy of
their "T&C". This way you are able to understand just how much it will
truly set you back to use that account. In any case, make certain that
you totally comprehend the terms and conditions before going with that
company.
Things to look out for are:
1. Charges to cancel (how much, details, contract duration)
2. "Variable" or Introductory Discount Rates - the discount rate is the
largest component in deciding just how much the true charge will be to
accept credit cards. Make certain that the rate is single, locked-in,
and non-changing. If it's on a sliding scale, or can be altered without
notice - run, don't walk...
3. Free Equipment Offers - their return policies on the equipment are
the most important to find out in this respect - for example, if the
equipment is "damaged" at all, many times you are liable to substitute
it at full market value - this can be extremely costly....
Now that you have that rudimentary information, to get the best possible
credit card processing rates shop many different companies. The options
are plentiful, and pricing plans and incentives are available for
setting up a merchant account - each one highlights a specific facility.
Finding out which one suits you the best is to your advantage. Some
companies waive the installation fee, but others have a one-time overall
fee and throw in other facilities at no charge. Each provider charges a
discount rate, ranging from 1% - 5% and up, based on the type of
account. A transaction fee, ranging from $0.05 to $0.25, is generally
included.
If you want to get the best deal on credit card processing rates, you
will have to do your homework well. Thoroughly search for the best
priced terms and conditions - but make certain the company has a good
reputation. You certainly don't want to get stuck with a company that is
lacking in the customer service department, particularly when your money
is on the line!
Things to consider when looking for a good merchant services company
include your average number of transactions per month, your profit
margin, your average order size, and number of times you will be taking
credit cards from your customers. Obviously, retailers with a lot of
volume will focus on lowering their discount rates and per-transaction
fees as much as possible more so than their monthly fees. Conversely,
small and micro-businesses with a bigger order size, but smaller
transaction volume are able to be a bit more flexible with the discount
rate and transaction fees. They turn their focus primarily on lowering
monthly/minimum fees.
In any case, discuss the subject with your peers in your industry and
contrast their opinions with the research into your prospective merchant
providers that you have done on your own. Taking credit cards should be
a good money making choice if you decide to use the right service.
Just be sure you double-check all those terms and conditions!
Chris Rempel |
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