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.
A high risk merchant account is a merchant account or payment processing agreement that is tailored to fit a business which is deemed high risk or is operating in an industry that has been deemed as such. These merchants usually need to pay higher fees for merchant services, which can add to their cost of business, affecting profitability and ROI, especially for companies that were re-classified as a high risk industry, and were not prepared to deal with the costs of operating as a high risk merchant. Some companies specialize in working specifically with high risk merchants by offering competitive rates, faster payouts, and/or lower reserve rates, all of which are designed to attract companies which are having difficulty finding a place to do business.
Businesses in a variety of industries are labeled as 'high risk' due to the nature of their industry, the method in which they operate, or a variety of other factors. For instance, all adult businesses are considered to be high risk operations, as are travel agencies, auto rentals, collections agencies, legal offline and online gambling, bail bonds, and a variety of other online and offline businesses. Because working with, and processing payments for, these companies can carry higher risks for banks and financial institutions they are obliged to sign up for a high risk merchant account which has a different fee schedule than regular merchant accounts.
When a merchant applies for a merchant account with a bank, payment processor, or other merchant account provider, there are many factors to consider before settling on a particular merchant provider. It is often possible to negotiate lower rates, and one should always request multiple quotes before choosing which high risk merchant account provider to use for their processing needs.
Credit Card Processing : Reviews and What to look for in a Merchant Account ?
Going with the credit card trend is just about another step towards shooting up on product sales. Products can range from consumer items to consumer services. Once quality, price, location, marketing, good reviews, and popularity are all in check, ease of purchase is also a consideration. The business might just be starting up or has been at it for quite some time, but there should still be room for innovation. Whether it's the usual shop across the street, even a flea market, or a web-based company, the option of paying using debit or credit cards would surely attract the picky and impulsive buyers who live on credit these days. Therefore, choosing the best merchant account really does make a difference.
5. Check up on fees
Compare the fees and standard services when considering several of these specific account providers. This will determine which provider has the best offer for you. Also, make sure to find out if there are any special fees like statement fees for a monthly statement being mailed to you. This will avoid any future complaints about getting billed.
Remember, a reliable account services provider can promote success to your business. Choose wisely.
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