Credit Cards World

If you own a business and accept credit cards you are probably paying a lot more than you should for your merchant account. You’re probably overpaying without knowing that you are or really even caring that much. But when you find out by how much you’re overpaying, you’ll be much more likely to switch to a new merchant account.

When pricing accounts, both new accounts as well as pricing to switch over, most merchants look at nothing more than the qualified discount rate and base their decision on this number only. Instead of basing your decision to switch on just the qualified discount rate alone, you should instead base it on your effective rate which is the ratio of overall fees to the gross volume that you process. If you base it on the effective rate, you can usually always find a lower rate by modifying some components of pricing. If you’re overpaying by $100 per month on the non-qualified rate, you can keep all other rates the same and reduce just that fee alone to get an extra $1200 in your pocket every year.

Getting your per transaction low will affect merchants who process a lot of transactions more than those that process only a few transactions per month. In addition to the regular per transaction fee, there is usually an AVS fee which is also per transaction any time the address verification system is accessed which happens on internet or card-not-present transactions. This can add to the overall per transaction amount. If you process cards on a physical terminal where the transaction is swiped, you won’t have an AVS fee.

For you merchants who are processing smaller ticket items, the per transaction fee usually represents a larger percentage of the overall transaction amount. Keeping this per transaction low is even more important that your discount rate if you have a low average per transaction.

Business owners that have a higher ticket item should be more concerned with the discount rates they’re paying far more than the per transaction fees as that represents a larger percentage of the overall fees. If you divide the total amount of fees by the gross volume that you process each month, you’ll have your “effective” rate.

Switching merchant accounts is not difficult and should come with an option to make sure that you can back out if the new contract doesn’t lower your overall effective rate. The point of switching your merchant account is to lower your rate and get better services. Find a provider that has a good rates, can lower your rates and has exceptional service.

Some small business owners are hesitant to switch to a new account simply because they have an early termination fee hanging over their head from their current processor. You can look for merchant service providers that can help you by offering a reimbursement or voucher that will pay you back for any termination fee that you incur.

Getting new equipment during a switchover often makes good sense because you will literally have no down time. If you choose to keep your same equipment, you will have to reprogram your existing equipment to point to the new merchant account which typically takes about 30 minutes to 1 hour depending on the connection speeds. The terminal will download the new program over the internet if you have a terminal with internet capabilities or it will download the new programming over the phone line.

Before you get a merchant account, be sure to check out Brian’s website about credit card merchant accounts. He has been setting up online merchant accounts since 2001 and is an expert in providing excellent service for business owners.

by Brian_G_Armstrong