Reviewing merchant account providers? What should be a simple and straightforward process can actual be quite daunting for a merchant – whether you are new to credit card processing or have been processing for years. The various cards, fees, and rates that come with accepting credit cards at your business, create a complicated maze of options that can easy overwhelm anyone trying to choose the best merchant account for their business. As a result of this confusion, merchants are constantly being taken advantage of by both overly complicated contracts, and unfortunately in many cases through outright deception by their merchant service provider.
Merchant Account Providers will often try and distract you by using words like “free”, “rates as low as…”, and other flashy sales pitches to confuse you from what matters. Ignore the noise and focus on these key areas to save money and find a merchant account that is suited to your business.
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Rates and Fees are a Shell Game – Focus on Overall Cost
When signing up for a merchant account it is tempting to search around for the lowest rates possible. It is also the area where 99% of merchants make the mistake of not understanding that rates are a shell game. Too often merchant’s sign with a merchant account provider because they’ve been offered a 1.05% rate, while the other companies they’ve looked at were all much higher. Only after they’ve signed the contract, do they realize the error of their ways – as they are left paying large fees and assessments (along with rarely if ever being charged that 1.05%). The reason for this is that there are over 300+ types of credit cards and Merchant Service providers can offer you a different rate for each type. Beyond that each rate can have 3 rates attached to it, Qualified/Mid-Qualified/Non-Qualified. That 1.05% is likely for a Qualified transaction on a select type of premium credit card that your business will never see. Don’t focus on rates – focus on actual cost
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Avoid Specified Length/Term Contracts
Failing to avoid specified length or term contracts is often the other main mistake made by merchants who soon regret their decision. While merchants who receive a full schedule of rates and fees will likely not be as exposed to the dangers of signing a long term contract, but regardless as to your current costs – you always want to avoid long term contracts.
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Customer Support and Service
Now that you have your choices narrowed down to a handful of choices, the next question you need to ask is what is their customer support and service like.
Do They Offer 24/7 Support?
While you hope you will never have any need for customer support, you want to be assured that if an issues arises at any time – someone will be available to speak with you.
Is their Support in-house or outsourced?
Nearly as important as to whether the support is available is whether it is handled in house or outsourced to another company. Avoid outsourced support staffs, your agreement is with a merchant company not with their support company – accountability is paramount and you want the person on the other end of the line to be invested in your problem.
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Does the sales person seem knowledgeable about your business?
It’s important to sign up with a merchant account provider that understands the challenges and uniqueness to your business. When speaking with your account rep, does he/she proactively address the issues above? Do they understand the type of cards your business will most likely see? Do they try and pressure you into signing a long-term contract? Do they personally know a member of the support staff? You can learn a lot about a company by speaking with a sales representative; always remember that you are choosing a company that will directly impact your business’ bottom line. The choice is yours, and it is important to choose a company you feel comfortable with.
Recommendations
The key point that I outlined above were created after years of working with dozens of different credit card processors for various types of accounts. Putting each of these processors to the test, there really is only one at this time that I can offer my full recommendation for. They are called Merchant Warehouse and have really distinguished themselves in the industry. While I believe that no company has any reason to ever lock a merchant into a contract, a very select few have the confidence in their support staff, and account pricing to sign merchants up with no contract or cancellation fees to be found.
Key Reasons behind my recommendation of Merchant Warehouse:
- They don’t advertise or promise things like “lowest rates”, as we reviewed seeing things like lowest rates typically means the processor is playing a shell game and you’ll pay the price once you sign the contract
- No Contract/Cancellation fees, obviously I’ve talked about this multiple times already but only because it really is such a big deal for me. Sign up with Merchant Warehouse and if you feel you’re not getting the best price or treated with the respect your company deserves you can take your business elsewhere. That is what you are looking for from any merchant account provider, and worse yet is the number of credit card processors who know this and advertise no contract/cancellation fee, but hidden in their paperwork is in fact a 3 year contract and early “termination” penalty. I recommend Merchant Warehouse in part because there are no games with this, there is no contract and no cancellation fee, sounds simple but in the industry nothing ever seems to be.
- Free Statement reviews, if you are currently processing (or are a current customer concerned you’re not getting the best deal), they offer a free appraisal of your statement to see if there are in fact any ways they can lower your costs
- Lowest Overall Cost Guarantee – while you already know to avoid falling for the “lowest rate” game, Merchant Warehouse advertises on a slightly different model which is offering the lowest overall cost guarantee. When Merchant Warehouse prices accounts to determine the overall costs they compare the full schedules of rates and fees, as well as the contracts of each provider in the industry to make sure you receive the lowest overall cost.
- While they do have a list of high risk businesses that they can not sign, they are extremely proactive in making sure individuals with legitimate businesses are approved. They also have agreements with various underwriters so that even if one underwriter may not typically sign an account, they will find someone who will take the account on. Very rarely do we see this as most processors only work with 1 underwriter and individuals attempting to sign with them have limited options.
- Each merchant account is customized to each business. Each phone call with a Merchant Warehouse representative is different, they make an honest effort to understand your business, the types of transactions you’ll see and the type of credit cards you are likely to see. This is such an important aspect of the process, and is a main reason they are able to save their merchants so much money.
- I have found their sales representatives to be extremely knowledgeable about business types, as well as the right equipment for each merchant.
- Speed – if you are looking to set up quickly this is definitely the right processor for you, they have great relationships and communication lines throughout the company and with their partners and can get accounts set up quickly and efficiently
- Customer Service is a major reason for my preference for advising small business owners to consider Merchant Warehouse over other processors, all of their customer service is handled in house and is available 24/7, 365 days a year. Plus with no contract and no cancellation fee, if you ever feel they are no treating you or our business the way you deserve you can leave without any penalty – this is very different than many other credit card processors who sometimes seem to almost challenge you to leave so they can collect their termination fees.
- If you own/operate an online, MOTO, or home based business Merchant Warehouse advances in technology mean that you have multiple options available to process credit cards at the lowest costs possible. They have even developed their own proprietary payment gateway (MerchantWare) which can save online merchants hundreds per year in gateway fees
If you are in the process of starting to accept credit cards or are looking to lower your current credit card processing cost I advise you to give Merchant Warehouse heavy consideration when considering which merchant account provider to use. You can visit their website by clicking here, or you can directly speak with a sales rep by calling 1.866.785.6380
Good luck with your search for the right processor for your company. I know that the process can be a difficult one and hope that the advice I have outlined above can assist you in finding the best credit card processing option.