What to watch for when switching merchant accounts

What to watch for when switching merchant accounts

Your merchant account for credit card processing is a vital tool for doing business; if you aren't fully satisfied with your current merchant account, it may be time to shop around. After all, competition to provide and oversee your merchant account is high. If your current provider isn't up to snuff, plenty of others want your business. Just be sure to do your homework before you start shopping.

You may wish to start by taking a good, close look at the Web site for your merchant account provider. If you don't see a clear explanation of its rates for various aspects of credit card processing, that's your first signal to look elsewhere. Credit card processing is a cost of doing business, but a merchant account should only cost you a little more than a penny on the dollar. Any merchant account fee of 2 percent or higher is exorbitant. That doesn't mean that the cheapest merchant account is necessarily the best. A reputable bank in your hometown should provide reliable merchant account service at a competitive rate -- so do many companies featured here at MerchantAccountInformation.com..

Beware of exceptions to the basic transaction fee. Some merchant account providers will raise the fee if you fail to generate a certain level of monthly credit card processing. Some will charge more if a customer uses a credit card from a foreign country.

While you focus on the credit card processing fee, also watch out for excessive application and/or set-up fees. Unreliable merchant account providers often try to score big on upfront costs because they are aware that they will lose partners down the road.

Insist on real-time credit card processing. You shouldn't have to wait a day or more for the cash to go into your account. Interest on those dollars will add up with a merchant account that features direct deposit.

Your merchant account provider may ask for a cash reserve as protection against chargebacks. Negotiate carefully. The larger your reserve, the smaller your transaction fees should be.

Published: August 19,2023