Unfortunately, credit card processors seem to have many areas where they feel justified to charge you a fee. Different processors levy different fees for different services, and the fee percentages vary. Thus, choosing a processor on the basis of cost alone is very difficult.
Merchant accounts are always charged a “discount rate,” a percentage charged on each transaction. The amount is based on your company’s evaluated risk, average sales ticket, transaction type, and total charge volume. Most providers charge one rate for card-present transactions and a higher rate for MOTO (mail order/telephone/Internet) transactions (card-absent). Card-present transactions usually cost between 1.5% and 2%. Card-absent transactions range from 2.2-3%. Some companies levy a monthly minimum fee, ranging from $25 to $35/month. If your volume is low, be sure to ask about this charge. The merchant bank will also charge a “transaction fee,” that is between $.20 and $.30 for card-present transactions and $.30 and $.50 for card-absent transactions. Some may also charge to issue monthly transaction statements.
If all of those charges are not confusing enough, there are additional costs. A basic terminal to process card-present transactions will run between $150 and $300. Terminals with printers are $200-$500, and wireless terminals can run from $500-$1,000. Alternatives include purchasing used equipment and leasing a terminal. Access the Ebay “Credit Card Terminal Buying Guide” at http://pages.ebay.com/buy/guides/credit-card-terminals-buying-guide/. You will have to be sure that any used equipment will work with the software that your processor is using. For card-absent transactions, a terminal is not required. You can use “virtual terminal” software to verify transactions from your PC. Sometimes this software is provided free as part of an e-commerce package. Purchase price runs about $150.
We’re still “not done yet.” Some providers charge application fees of up to $200. These charges may be non-refundable, even if your business is turned down for an account. There may also be set-up or account activation fees. Other possibilities include programming fees, Internet processing fees, customer support fees, early termination fees, and more.
Some additional tips . . . Be sure to ask how long it takes for funds to transfer. MOTO transactions usually take considerably longer to clear. Check to see if the variable fees such as set-up, cancellation, and monthly minimum, are negotiable. The higher your dollar volume, the more likely the company will be willing to work with you.
Customer support is an important part of the package. You may want to check references with other merchants using the providers you are considering. Also ask about wait time, chargebacks, staffing hours, and charges per incident. If you are selling online, be sure that the processor offers secure ordering through SSL. Finally, and probably most importantly, be sure that the company you are planning on working with is legitimate. Check for their physical address and phone number.
Read your contract very carefully. Be sure that you understand all fess, minimum charges, the term of the agreement and any early termination penalties, in addition to.the services and policies of the providers you are considering before you choose.
The wrong way to choose a credit card processing company is basing your decision solely on cost. Many companies offer cheap services, but the old adage “you get what you pay for” definitely applies. If a credit card processing company offers card users prizes and discounts, you should know that your business will ultimately pay for these incentives. Don’t hesitate to negotiate these expenses with your vendor.
Posted by: Xeon E5 | February 25, 2013 at 11:58 PM
Credit card processing is credit card Company’s matter, and I think that credit card companies generally prefer to outsource the credit card processing, however consumers can get this information from the services providers for self satisfaction.
Posted by: quick quid review | February 02, 2013 at 04:14 AM
It’s really a difficult and wise decision to choose a good credit card process. It’s not a simple thing. We must understand this very well, sometimes companies charge very high credit card processing charges.
Posted by: paydayuk | January 22, 2013 at 06:38 AM
Reading out the contract carefully and accepting the terms and condition wisely are the highting point of your post . I will add one more thing that before opting for the service, do ask for the hidden charges becuse in this industry people get cheated by the hidden fees .
Posted by: Best wireless credit card machine | September 27, 2012 at 02:22 AM
Very nice blog. I love your ideas - simple and back to basics . Great ideas
Posted by: Credit Card Payments | August 20, 2012 at 06:26 AM
Very interesting
Posted by: Credit Card Services | August 17, 2012 at 02:07 AM