Merchant Account Rates
What are your Merchant Account Rates?
This is a question our sales team hears throughout the day. So why doesn’t Merchant Warehouse just post our rates for merchant accounts on our website so that customers can compare pricing? The answer is a bit more complex than you may expect.
Simply stated, if you shop for a merchant account by focusing only on rates, you will end up paying too much.
For many merchants, the merchant account rates can amount to only a small portion of their overall cost. If you only consider merchant account rates, you are excluding a long list of potentially costly factors such as credit card equipment, start-up or termination fees, annual fees, contracts, monthly minimums, statement fees and many other expensive pitfalls.
Contrary to what some companies would like you think when they boldly advertise seemingly low rates, there is no “standard” rate for merchant accounts for pricing comparison. Visa® and MasterCard® each have over 100 different merchant account rate categories based on the type of card, environment in which it is accepted and whether or not all the cardholder information is collected properly and accurately. These categories are then consolidated by each processor into groupings with averaged rates called “qualified,” “mid-qualified” and “non-qualified.” The less “qualified” the transaction, the more you are charged.
So, the next time you are looking for a merchant account, remember to avoid the, “What are your rates?” question. Instead, try to focus on the overall expected cost of processing and factor in all potential fees. If a company guarantees to have the lowest rates, ask to see it in writing. If they have the guarantee in writing, you will quickly realize that these low merchant account rates only apply to a very small fraction of your credit card transactions.
Hopefully, it is now easy to understand why we do not post rates for merchant account on our website, as advertising them can become confusing and potentially deceptive.
Merchant Warehouse guarantees to have the lowest overall costs of processing and we put it in writing here. You can count on our professional staff to educate you on all your options and advise you on how to get the best possible rates for your specific business situation.
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2 Responses to “ Merchant Account Rates ”
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So I have to blindly accept whatever you want to charge me??!! What is the cost to do business with MW? I need a merchant account/equipment, there are over 500 merchant account businesses out there, how am I supposed to find one and I don’t have time to interview every one of them.
Hi R. I understand your frustration about shopping around. It can be challenging to talk to all the right people and feel like you are properly informed. That said, I do think you owe it to yourself to at least narrow down your options to a few companies and engage them in brief conversations. Here is my reasoning:
1. Credit Card Processing is a business cost. You would shop around for the best provider for other business costs so why not this? Instead of thinking of a universe of 500, why not make a list of the 3 or 4 that seem best based on reviews, comments, website etc and start there?
2. Posted rates and fees are typically intentionally deceptive and, probably, irrelevant to most businesses. You need to know what it will cost you to process cards, not what it will cost some business that is nothing like yours. To use your point, there are hundreds of business types out there and they all have potentially different processing needs and environments. A customized quote is your best bet.
3. Rates and fees are just a small part of the potential cost. Are you being locked in to a contract? Are there annual or termination fees? Are you being offered equipment leases (bad) or terminal reprogramming fees? Those things can end up costing you a lot more in the long-run.
4. There is more to consider than cost. When there is a problem, don’t you want to work with the company who will respond best to help you? Costs being equal, doesn’t service also matter?
Good luck in your search.
Brian