Processing Credit Cards Cheaply: How to Find the Best Merchant Account Deals


onlinetransAs the cost of business increases, many companies are looking for ways to reduce spending and retain revenue. Though you may not be able to decrease every cost, there are services you that allow a bit of wiggle room. Your merchant account is one of those services. As the credit card processing industry is competitive, merchants have more options now than in previous years. As with any other budgeting plan, there are tips you should follow to save on order processing and save more of your hard earned profits.

Comparing Fees and Rates

If you have already researched merchant accounts, you may have already seen the list of fees charged per transaction. These fees, also known as discount rates, are made up of an interchange fee, which is paid to the credit card company and an additional fee charged by your merchant provider. This is why different providers will have different fees for identical charges. The additional fee is determined by the merchant provider as the interchange fee is determined by the card company. However, you may never discover how much of the fee actually goes to the merchant provider if you are given a base rate.

These rates may vary for a number of reasons, for instance the age of the merchant provider, size of the providers merchant base, and the fluctuating interchange rates. The only way to save on these fees is by choosing a well-established provider with lower rates. Many of the new merchant providers often add a higher fee per transaction as well as hold a higher interchange rate by the credit card companies.

Contract or No Contract

If you read the fine print given by the merchant provider, there is no doubt you may see a cancelation fee for early termination of your contract. Some of these fees can cost more than keeping the contract. With today’s economy causing small businesses to struggle, the closing businesses are finding out the hard way how much it can cost to terminate their contracts.

There are no-contract merchant accounts available to those who prefer to go month-to-month. These services allow you the option of cancelling your account with no additional fees as there is no contracting holding you back. However, the downside to these services may cost you more than signing a contract. As interchange rates fluctuate, you will be vulnerable to paying new rates if they increase. With a contract you can lock in a rate that won’t change throughout the term of your contract, typically 3 years. For many businesses these locked in fees can offer stability and savings.

Lease or Purchase

There is another method of saving that many merchants fail to take advantage of. By purchasing your credit card processing equipment rather than leasing, you can see savings in the long run. As some of the equipment needed is fairly cheap, you could end up paying $45 a month for a piece of equipment that only costs $90. This means you would see savings after only 3 months with the equipment. Even the cost of replacing broken equipment every few years is much less than the monthly payment of the lease.

There are a lot of ways a business can save on costs and keep a larger portion of their profits. However, their current merchant service provider is one of the costs that are often overlooked. In today’s economic climate, a dollar saved is definitely a dollar earned. Take a look into your current service agreement and see where you can shave some of the fat to keep your money yours.

Author Tony Alvarez is an avid blogger. If you’re in the market for a payment processing company, such as United Bank Card, be sure to read the reviews posted online.

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