Whether you run a brick-and-mortar store or own an online one, you can benefit immensely by having a business merchant account. This account will enable you to accept credit cards, debit cards, and other digital payments from your customers. By allowing your customers the freedom to pay as per their choice – cash or cashless, you can open up your business to more customers and increase your sales exponentially. However, selection of the credit card merchant services can be difficult if you aren’t aware of what exactly you should look for in an ideal merchant service provider. This post will help you make an informed and right decision in this regard. So, let’s begin with factors you must consider when shortlisting the merchant service providers!
Comparing apples to apples while choosing a merchant service provider can be difficult because of the three distinct types of rates and virtually a never-ending list of fees that your merchant service provider may or may not charge.
The most popular and common way of comparing the MSPs (Merchant Service Providers) is the “effective rate” comparison. The effective rate refers to your total credit card processing fees divided by the total volume of sales your business generates. The result is expressed in percentage. You can find all the details on your monthly merchant account statement, if you already have one.
We believe a “nice” rate falls in the range of 3-4%. However, you don’t need to panic if you’re paying higher than this. Some merchants, such as high-risk merchants, are bound to pay significantly higher processing rates than the standard rates due to several factors including heavy chargebacks, refunds, etc.
There are several factors worth considering on your business merchant account bill, such as the “non-percentage-flat-fee” in your payment processing rate will impact the businesses that process several small transactions in comparison to a “percentage-based-fee”. However, the reverse holds true for the businesses that process large transactions most of the time.
So, if you are paying a significantly higher “effective rate”, it is recommended that you go through the fees you are paying and check all fees that look reasonable and the ones that look “junk”.
Before signing up for the card merchant services…
Make sure you have some relevant questions ready for asking your prospective merchant service provider before signing up. Questions you may ask your MSP:
Finding the best card merchant services can be a tough job for high-risk merchants as their options are limited. However, thankfully, there are some good MSPs such as Payment USA that offer outstanding business merchant account services at reasonable and fair cost. While many merchants end up falling for the “low-cost” merchant services thinking them to be the “best”, let me tell you both aren’t the same. Lowest processing rates can turn into a costly mistake as you may discover the many “hidden” and “undisclosed” prices later on that make your “low” processing fee eventually way “higher” than you thought. So, don’t just decide everything around the lowest processing fee rather try to understand the overall total cost that you will have to pay over time. This cost includes account fees, processing rates, and other costs (like chargebacks). To further complicate matters, there are different models for payment processing rates that make it difficult for the merchants to make apples to apples comparison among the MSPs. With trusted and reputed MSPs like Payment USA, however, you can be sure that you are getting the best professional pricing for your business merchant account and card merchant services. For more information, please contact the experts at Payment USA.