What's the Difference Between One Processor and the Next?
Credit card processing companies seem to most business owners as all being alike. They all claim to be able to help you accept credit cards and provide 24/7 telephone support with the lowest processing fees. At least, that's what it seems like.
However, just as there are different names for each credit card processing company, there are differences between the services they can provide and the quality in which they service your business. On the right hand side of this page I've listed every company that can help you process a Mastercard.
One thing you should really keep in mind is that, the ability to accept credit cards is actually a benefit your business gains, which allows your customers the ability to afford buying from you and the convenience of paying with the payment type they have on hand. Consider this. Being able to accept credit cards or debit cards allows your business to avoid establishing a credit department. You don't have to handle financing or issuing lines of credit. Therefore, there is going to be a cost associated with accepting non-cash payments.
I want to impress this point upon you because lately, people seem to have forgotten the importance of why businesses accept credit cards. In dealing with business owners, such as yourself, my job is to keep my clients happy. Of course, along the way I realize that because we live in a commerce driven society - business owners can get into the habit of shopping for credit card processing services just like... let's say... buying a hamburger.
For example, the #1 most asked question is "What are your rates?" After I respond with the giving them the discount rate, along with the monthly minimums, statement fees, authorization and batch rates they usually respond by saying, "Well, I just got some other quotes and they don't charge batch fees, authorization fees, minimums or statement fees." At that point I really feel like rolling my eyes and sighing, but I can't. No matter how annoying this response gets, I have to keep focused on that fact that these business owners, are only uneducated and untrained. Therefore, they don't know that those things don't prove it's a better deal. What really gets my goat is that processing companies are allowed to advertise these tricks.
To fight this type of credit card processing ignorance, and advertising, I have to use hard evidence. Therefore, to prove to these business owners that they have been misinformed, I refer them to the Mastercard Interchange Rates & Criteria Report. You can download it for yourself by clicking on the link.
This report lists the Interchange Rates charged to MSPs (Merchant Service Providers) and Acquiring Banks. These are the fees that credit card processing companies MUST pay. There are no freebies from Mastercard, Visa or any credit card company.
This report clearly shows that every MSP or Acquiring bank (companies listed to the right) has to pay, in essence, the wholesale costs for processing credit cards. Now, these fees have to be passed on to merchants, you the business owner. These fees are then called Discount Rates and fees that must be charged to cover the Interchange Rates charged by Mastercard or Visa. In the report, if are able to make a general sense of all the figures, you will see that there are in fact monthly minimums, authorization fees, batch fees, costs associated with processing credit cards.
So, when any company tries to make you believe that your not going to be charged fees, watch out! Because what's going to happen is the fees they claim you won't be charged, will be billed to you...but actually built into your other fees. I caution you because, from experience, 9 times out of 10, companies who offer things for free tend to overcharge for services. I don't care how loyal you are to your bank or your processing company, if your money is important to you, don't fall for these free offer claims.
So What Choice Should You Make? Who Should You Work With?
Deciding who you should pick to help you manage your credit card processing service really needs to narrowed down to your consultant. Who is the person, the face or voice, that you can rely on and call on to help you negotiate your merchant account fees?
Who can you call on the weekend or holiday, evening or otherwise to get advice, not only on credit cards, debit cards or check acceptance, but also on simply how to increase your business sales, marketing, advertising, customer service or wholesale supplies? That person is who you should work with. Sometimes, unfortunately, picking your employees son in law who happens to work in merchant services isn't the best choice. It's going to come down to experience, dependability, accessibility and performance history.
Therefore, if you're one of the few business owners who knows that all those so called "Lowest Merchant Rate" and "Acquirer of the Year," or "Free Credit Card Machine" offers are really just hype, perhaps your someone who needs to be talking to a straight forward consultant. Someone who's going to give you advice, even if it's not what you want to hear.
If this is the type of professional advisor you want on your side, you might be the kind of business owner I want to with as well. In the end it's your choice after all. All that I can do is point you in the right direction.
