Don't Overpay For Merchant Accounts

If your business already has merchant accounts for accepting credit cards, you may be paying more than you should. Many businesses open merchant accounts and never think about it again other than processing batches and waiting for the money to show up in their bank account. Merchant accounts providers have become a lot more competitive in their rates recently, so if you haven't checked out what you're paying compared to the going rate for other merchant services providers, you may be overpaying.

What To Look At

When comparing the rates and fees of other merchant accounts providers, look at more than the qualified discount rate. Look at the effective rate, or the ratio of the comparison of overall fees to the gross volume you business processes. You can usually find a lower rate for merchant services based on the effective rate, even if you have to modify some of the components of the pricing. When overpaying in the amount of $50.00 per month on a non-qualified rate, you can keep your other rates the same by reducing that fee, giving you an extra $600.00 per year.

Lower Your Per Transaction Fee

If you process a lot of credit card transactions, see if you can lower your per transaction fee. For example, if you process 1,000 credit card transactions, you shouldn't be paying the same amount as a business only processing 10 credit card transactions per month. Many merchants forget about this fee, especially when they have an old merchant accounts provider who didn't make the effort to change as the business and the number of monthly sales grew. In addition, make sure you aren't being charged a per transaction fee for AVS on card present transactions. You should only be charged an AVS per transaction fee for card not present transactions.

Small Ticket / Large Ticket

If you sell small ticket items, you should probably be more concerned with per transaction fees since they usually represent a large percentage of the total transaction amount. It is important to keep this fee low when you sell small ticket items, even more important than lowering your discount rate for low amounts per transaction on your merchant accounts.

Businesses that sell expensive items should concern themselves more with the discount fee rather than the per transaction fee because it represents a bigger percentage of the total fees. Dividing the total of your fees by the gross amount of volume you process will equal the effective rate of your merchant accounts.

It's Easy To Switch

If you find a merchant accounts provider who can offer you a better deal than you currently have, go for it. It's easy to switch merchant accounts providers. Make sure your new contract has an “out” in case it does not lower your effective rate. Ask your new merchant accounts provider if they will help you avoid any cancellation fees from your current provider by giving you a reimbursement or voucher that will essentially pay for the fee. If you don't want to reprogram your old equipment to point to your new provider, consider upgrading and purchasing new equipment that is pre-programmed. Some merchant accounts providers even offer free equipment if you switch over to their service.

You can often save money and get better merchant accounts services simply by taking a look at your existing provider.