While looking at the ways of reducing the cost associated with merchant accounts like processing fee, the following tips will provide a useful guide. This can result in cost saving for customers who are on the lookout for cheap merchant accounts. These ideas are effective and can be adopted after using other ideas that are shared by fellow merchant account holders.

Spending time in researching various merchant accounts: Firstly, you should be wary of establishments that tend to fool customers by way of promises they never keep. Their primary motive is to lure customers so that their business can flourish. Customers who fall for such promises will realise much later that the actual prevailing rates are not anywhere close to the rate that was quoted initially. The best way to overcome this problem is to collect information regarding rates from short listed companies of good repute. It is advisable to gain access to the terms and conditions that govern the rates that are charged. Comparing the quotes of different merchant account providers will provide an idea on the average market rates. Having knowledge on the current market rates adds an edge to the customer when he meets the representatives of the merchant account providers.

Refer the ‘Interchange plus Pricing’ values. This actually indicates the minimum amount that should be paid to VISA and MasterCard. Generally, it is the large scale merchants who avail ‘Interchange plus Pricing’. But, nowadays even small scale merchants benefit from it. This facility can result in a drastic cost reduction by reducing the rates though it also depends on the industry type that the merchant is associated with as well. Thus, all types of merchants will not qualify for it and in this case those merchants can opt for tiered accounts.

Tier pricings of service providers should be compared to arrive at the better option. The different parts of the pricing associated with merchant accounts are:

Rate of discount – this is applicable for qualified, mid qualified and non qualified tiers. While the mid and non-qualified tiers are classified as downgrades, the rate that is charged for regular credit cards is minimal for qualified tiers.

Fee associated with transactions – Whenever a transaction takes place by way of phone, internet or keying/swiping, a fee is collected for processing the transaction. This fee affects the customer financially when the size of the ticket is average. Transaction fee are a large percent of fee when the average ticket is less.

Fee associated with statements – This fee should be paid every month and sometimes a huge amount is charged for the service meted out. This is a fixed fee and it is advisable to keep this fee to a minimum amount.

In addition to all this, strive to minimize the processing fee (minimum) which is applicable when sales numbers are less every month. Another tip is to avoid monthly plans though it is marketed widely. The fee to be paid for such plans is on a monthly basis. Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.