4 key tips for negotiating with merchant account providers

4 key tips for negotiating with merchant account providers

When you are ready to open a merchant account for your business, the sheer volume of choices might seem overwhelming. There are many different options and, since every company has a unique fee structure, comparison shopping can easily induce a headache. However, your power lies not in comparing providers, but in negotiating for what you want.

All aspects of credit card processing are negotiable if you are willing to open your mouth and discuss options with a customer service representative. Every merchant account you encounter has one thing in common: The company providing it wants your business. If you remember this, you might be able to save hundreds of dollars a year.

Tip No. 1: Determine What is Important
It is doubtful you will be able to negotiate every aspect of your merchant account contract. So, before you contact providers, decide what you are willing to compromise. For example, according to Contract Web Development, most start-up business owners do not want to get roped into a long contract. If this is the case for you, enter negotiations with the knowledge that you want a flexible contract.

Once you figure out the most important things you need, state them up front. Tell the merchant account provider what you are willing to pay, how long you are willing to commit to service, and other important information, then see if they are willing to meet your credit card processing price. They might come back with a middle-of-the-road figure, so you will have to decide where you want to draw the line.

Tip No. 2: Use Your Clout
Do you know people who know people? Believe it or not, you might be able to negotiate better terms on your merchant account simply because of your associations. For example, you might be a member of a trade organization that offers its members discounts on credit card processing services. Don't start looking until you know what you are entitled to.

You can also use referrals from other business owners as leverage. If you've been referred by a long-standing member of a merchant account firm, you might have more leverage than if you just walked in off the street.

Tip No. 3: Quote Numbers
Maybe you really like the reputation of Merchant Account Provider A, but Merchant Account Provider B is willing to give you better terms. Or maybe you are already a customer of Provider A, and you are considering a switch to Provider B. Whatever the case, knowing your options will give you negotiating power when it comes to credit card processing.

Take the numbers you've been given to the merchant account provider you want to use. Let them know you've received a better offer -- make sure to give exact numbers -- and ask whether they are willing to beat or match that price. Nine times out of 10, they will jump at the chance to best the competition.

Tip No. 4: Be Willing to Walk Away
In any negotiation, the party who is not willing to table the deal is probably on the losing side of the battle. If you aren't willing to walk away from a merchant account when the provider cannot meet your needs, you will wind up paying more than you wanted to in the first place.

Fortunately, once a credit card processing company sees you are serious about what you want, they are more likely to fold. Walk away from a contract if you feel it is not fair, then wait and see if they contact you again with a better offer.