Credit Card Processing : Reviews and Expectations
The primary costs to a merchant of merchant accounts are discount rate and transactions fees. The merchant account provider has a lot of latitude in the pricing structure.
Three tier pricing of Credit Card Processing is one of the most common pricing schemes. Using 3 tiers pricing, the merchant account provider groups the transactions into 3 groups (tiers) and assigns a rate to each tier. The three tiers are qualified, mid-qualified and non-qualified rates.
A qualified rate is the lowest tier. It is what a merchant is charged when processing a consumer credit card in a way that has been defined as standard by the merchant account provider. The qualified rates is what is usually quoted by merchant account salespeople. A mid-qualified rate is what the merchant is charged if processing a transaction outside of standard parameters. A mid-qualified rate may apply to rewards or corporate cards, which can comprise up to 40% of the cards used for purchases. The Credit Card Processing, of course, has no control over what card a consumer uses.
Accepting Credit Cards
As a small business or a small-small business (under 10 employees) it is important that you consider accepting credit cards if you don't do so already. People expect to be able to pay with plastic. They can pay with credit cards at fast food restaurants, gas stations, coffee shops and more. It is just expected, fairly or not, that a business be able to accept credit cards.
The first thing you need to do is evaluate Merchant Acounts. You may naturally assume that it is just easier to use your bank to set up your account. Well, that is convenient, but is it really in your best interest.
Many small businesses fall into the trap of latching onto their first merchant account and staying with them because of the convenience. They do this to their detrement. Over the past few years rates have lowered, while these small companies, out of loyalty or convenience, have been stuck paying the same rate they had when they first started.
Online merchant accounts are another consideration. You will need virtual versions of the credit card processors described above:
- Secure Gateway: This translates the information entered onto your website into data that can be read by an electronic card processing system.
- Virtual Terminal: This eleminates the need for a physical point-of-sale card processing system.
- Online Shopping Cart
- Virtual check processor
- Wireless terminals
Go into acquiring a Merchant Account with your eyes open. It is a service that you will need if you plan on being competitive, so make sure you do it right.
Credit Card Processing : Reviews and What to look for in a Merchant Account ?
Understanding the calculate expenses of your trade donor can be tricky. Recollect my Google example - there are more trade account donors than there are people looking for internet trade accounts so ask questions and be finicky! Typically, an internet trade account will have three natures of expenses:
* Up Front Application Fees
* On available rigid Fee
* disregard degree
* Rigid Transaction Fee
* Termination Fees
* Miscellaneous Fees
Let us confer each nature of cost:
Up Front Application Fees
Many internet trade accounts will want an up front application fee. This fee, supposedly, is to mask their expenses for processing your application. In case you want not to open an internet trade account, they still mask their original expenses. Though mutual, many donors surrender these fees and I urge that you want a donor that does not want an up front fee.
A bit more cryptic in the small typeset, a termination fee can direct if you cancel your trade account inside a precise time of time (typically inside one year). But beware; some trade donors want a three year commitment!
If a patron desires a refund and they want their trust license trusted, an internet trade donor will attack you a separate fee (typically between $10 - $20). Read the bond tenderly, as other singular fees may direct.
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