How To Get A Merchant Account

In the past interchange rates were restricted to members of credit card associations and merchant account / credit card processors. In easy speak; interchange is simply the cost of doing business. In addition, credit card processing companies add basis points and fees to interchange in order to mitigate their company cost and add profit.

To see an example of interchange rates, you can do a simple search engine query for Visa USA Reimbursement Fees.

The good news is that merchant account holders can “peak behind the curtain” and negotiate from an informed platform .The bad news is that many merchants have no idea how and what costs to add to the equation. Credit card processors and ISO’s make their money from the previously mentioned basis points, equipment, and fee charges. Many less honorable companies take advantage of unsuspecting merchants promoting savings with low percentages for transactions that you will never perform, while overcharging for your company’s method of card acceptance and type. Another trick performed, most commonly, is not fully disclosing all the fees (thus the hidden fee heartache begins). However, my favorite method is the “free terminal” promotion. Yes, the terminal is free as long as you are a client. However, you find yourself paying for services and fees that you had never seen before. Think about it. Can a merchant account holder give away it’s most expensive asset to a customer in hopes that they will continue to shop in their store? No! It’s bad business. Nothing of any worth is truly free.

The question for you Mr. or Mrs. Merchant, is do you want something for nothing? Is your business a glorified hobby?

Then why would you expect other companies to conduct business that way? Even though it may not sound as appealing, the truth is typically the best way to conduct business.

The two questions a merchant should ask a merchant account service provider is:

(1) Are you a wholesale or third party provider?

(2) “Do you have an approval rate above 85% for retail business?” Why question #2? This is because many companies that provide free equipment hope that the merchant has previous processing. Not only previous processing, but processing above five thousand dollars a month. That way, whether it is a hidden fee, a customer support / technical support fee, or an annual membership with some obscure club; their investment is returned.

Those that are not in that category are put through more restrictive underwriting. Thus, making your chances of approval, a rigorous process to say the least (if approved at all).

So far we have learned the “what’s and how’s” in regards to interchange and free equipment. In my next article, I will teach you the four basic platforms you can use to tailor your merchant account… Hope to see you soon.

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