|
PROCESSING RATES OF ONLINE MERCHANT
ACCOUNTS
Good merchant accounts are an asset to
your business by increasing your sales
volume which results in increased
profits of the company. However, if you
don’t do proper research and don’t look
at the fine print carefully then you may
end up buying a merchant account that is
more a liability to your business than
an asset. According to historical data,
merchants who do not look through the
fine print to find out about hidden
charges end up paying more than those
merchants who are charged higher rates.
Be very careful, as you might not be
able to get out of it because you would
also signed and expensive contract which
penalises you if you want to change your
merchant account provider.
Therefore, the first question to ask the
merchant account provider before getting
an online merchant account is what are
the fees and rates charged by you? You
should inquire the fees and rates for
each of the merchant account services.
Then do the same with several merchant
account providers and choose the best.
Some wise merchants search for the fees
and rates on the internet also. If you
see through the pages related to pricing
then you will find your answer. The
lowest you might see would be around
1.59% for an online merchant account
rate. But don’t be fooled by that
advertisement. You have to dig deep and
find out what the company is offering at
that low price and more importantly are
there any hidden fees.
The first thing that you should do when
you see an advertisement such as the one
above is to go through the fine prints
very carefully. For example, the ad
which said 1.59% would actually mean
that the company is charging that rate
for debit card transactions and not
credit card. Therefore, it will not help
you much. The real thing that you should
find out is what is the rate for the
processing of credit cards? Not debit
cards. In most cases the rates will be
more than two percent. You will be
better of to find a credit card
processor who does not charge different
rates for credit and debit cards so that
you can take advantage of debit card’s
lower acceptance cost.
Beware that the processing rate is only
1 component in the cost of processing,
but it is the most significant one. Also
look into the issue of dissimilar
processing rates charged for different
varieties of the credit cards. For
example, a few of the rewards,
commercial and b2b credit cards attract
a higher processing rate than other
types of credit cards. There may be
several other charges and fees.
Therefore, make sure that you will be
aware of each of them and also be sure
that your low credit card rates are not
counteracted by higher charges
elsewhere. There are several tools that
are available on the internet to help
you to estimate what your overall cost
for processing each transaction of the
credit card will be.
|
