Merchant Services Comparison: An Advertised Percentage May Not Be the Bottom Line

Prices and services offered to merchants vary significantly. Before you jump in to a new form of transaction processing, it is important to perform a thorough merchant services comparison. Doing so will ensure you get the most suitable provider and deal for your specific business needs. While seeking out providers online, you may see many banners advertising the lowest rates. The banner may be displaying a rate for a particular service. Merchant services have more than one set of fees. Merchant charges are determined by factors such as the volume of sales, types of transactions, and a number of hidden fees. To get the best price, you will have to break down all of the connected costs. A company may advertise a minimum rate which only applies to a specific volume of sales. Smaller businesses can be subjected to more expensive rates. This low rate is provided when the card is actually swiped at the terminal in a retail setting. Mail order or telephone payments typically have a higher rate. This is due to the customer not being present at the time of the transaction. These payments are at a higher risk when it comes to consumer fraud. Elevated fees are charged to balance out this risk. If you see an advertisement for a free merchant account, the word “free” refers to the actual account setup fees and not the charges per transaction. Having a basic understanding of this information is imperative when you are performing a comparison of transaction handling providers.

Compare Merchant Services: Charges Which May Be Less Obvious

As you start to compare merchant services, ask for a list fees charged in conjunction with provider services. Each company will vary in the fees they charge. Here are some additional fees which may be included in the list:

  • Individual Transaction Charges
  • Statement Fees
  • Cancellation Charges
  • Setup Expenses
  • Batch Processing Fees
  • Minimum Monthly Charges
  • Support Fees

Knowing the exact charges when you compare merchant services can allow you to find the best price. A merchant services provider will most likely charge a fee per transaction. Some also set an exact number of transactions or dollars which are necessary each month. If this requirement is not met, an additional monthly charge is included. Unless the provider is offering some kind of introductory special, there will be charges for setting up the account as well as any equipment. Support of the equipment may be provided as an extra cost. Sometimes a business will sign a contract for specific services and then decide they are unsatisfied. A charge may be required to cancel the current agreement. At the end of the day, all accepted transactions will be processed in the form of a batch file. There may be an expense for the batch processing. Fees can be associated with just about any part of the transaction process. Chargeback, check services, and collection assistance all cost money. Not accounting for one of these fees could leave you in a bad situation later on. Knowledge of these charges will be very helpful during your merchant services comparison.