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Looking for a Cheaper Merchant Account Provider

Sunday, April 01, 2007

A lot of times, people go looking for the cheapest merchant account provider.  I totally understand that people want to save money.  However, a lot of times, when you are dealing with a few basis points - you are only dealing with a few dollars every month.  And the time that you have put in trying to get a better deal even though you know the provider is top notch, costs you more money in the long run.

For example, let's say that you are going to be doing $10,000 a month.  And this largest merchant account provider wants to charge you 2.44% for your discount rate.  And chances are, it will cost more to maintain your account but the provider still wants to do business with your company.  But you found another processor who is willing to offer you 2.29%.  Now the actual difference in this is about $15.00.  And chances are, you charge $150.00 an hour at least for your time.  In the time that you have taken to inquire about a cheaper rate, you probably have already spent the $15.00 and then some.  And you know that the other provider might be smaller and could not support all your needs when your business grew.

Or maybe Visa and MasterCard raised their rates.  So the merchant account provider decided to pass along those fees to you, the merchant.  And let's say you are doing $10,000 a month.  At raising your discount rate 4 basis point (.04 per cent), it is basically $4.00 more a month that they are charging you.  The time you have taken out of your schedule to possibly complain to others, etc., is time that you have wasted.  And of course, you understand that usually these smaller companies actually cost more to maintain but you would rather have a large, stable company process your credit card transactions.

The best thing, of course, use a large, stable, reliable processor - since this is your money in the end.  Pay a few extra dollars a month to know that you have a multi-million dollar company behind each transaction.

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