Business owners often overlook their merchant accounts because it only represents a small part of their overall financial picture. The reality is that merchants are overpaying and often don't do anything about it because they believe it's too much of a hassle to switch. Merchants that process transactions on a regular basis can save a significant amount of money by switching and it is significantly less work that most merchants might think.
The discount rate is the rate that banks charge each other to process transactions and is used to manage the risk associated with transactions as well. There are three different discount rates, there's the qualified discount rate, the mid-qualified discount rate and the non-qualified rates. These rates vary depending on the type of credit card and some other components of the transaction.
There are per transaction fees for every merchant account. Sometimes this fee is not charged if the merchant has history and does a flat rate on just the discount rate. But even if the fee doesn't show up on the statement, the merchant account provider and the bank still have this fee. They simply make it up in the discount rates. Flat rate pricing has one advantage and that is simply for accounting. It may be easier to know that every transaction is subject to a flat rate, either a flat per transaction or a flat percentage or discount rate.
For merchants processing smaller ticket items, such as fast food restaurants or convenience stores, the per transaction fee usually represents a larger percentage of the overall transaction and can significantly increase the overall percentage you're paying for accepting credit cards.
If you process large transactions, the discount rate will affect your fees much more than your per transaction fee. For those processing retail transactions where the card is physically present at the time of the transaction, an important note to remember is that if you process Visa and MasterCard check cards, they should process at a lower rate than your "regular" credit cards. This is where most of the savings occur for the majority of business owners that choose to switch their merchant account.
If you are ready to switch merchant accounts, you should start by looking at one of your statements and calculating your effective rate. If you'd rather not have to learn anything about rates and fees and simply want to get someone else to do this for you, find a competent merchant services professional who will evaluate your current rates and provide you some data on what it would cost to switch and estimate your savings. Finding someone you trust is critical as merchant services professionals don't always have the best reputation for integrity thanks to some in our industry that use deceptive practices and are dishonest.
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 can also be a benefit of switching your merchant account. Competition for new merchant accounts is fierce so some of the incentives that processing companies are offering include new equipment. So, if your equipment is older or if you just want new equipment, make sure to ask about that and make that a part of your switching strategy. - 15246
The discount rate is the rate that banks charge each other to process transactions and is used to manage the risk associated with transactions as well. There are three different discount rates, there's the qualified discount rate, the mid-qualified discount rate and the non-qualified rates. These rates vary depending on the type of credit card and some other components of the transaction.
There are per transaction fees for every merchant account. Sometimes this fee is not charged if the merchant has history and does a flat rate on just the discount rate. But even if the fee doesn't show up on the statement, the merchant account provider and the bank still have this fee. They simply make it up in the discount rates. Flat rate pricing has one advantage and that is simply for accounting. It may be easier to know that every transaction is subject to a flat rate, either a flat per transaction or a flat percentage or discount rate.
For merchants processing smaller ticket items, such as fast food restaurants or convenience stores, the per transaction fee usually represents a larger percentage of the overall transaction and can significantly increase the overall percentage you're paying for accepting credit cards.
If you process large transactions, the discount rate will affect your fees much more than your per transaction fee. For those processing retail transactions where the card is physically present at the time of the transaction, an important note to remember is that if you process Visa and MasterCard check cards, they should process at a lower rate than your "regular" credit cards. This is where most of the savings occur for the majority of business owners that choose to switch their merchant account.
If you are ready to switch merchant accounts, you should start by looking at one of your statements and calculating your effective rate. If you'd rather not have to learn anything about rates and fees and simply want to get someone else to do this for you, find a competent merchant services professional who will evaluate your current rates and provide you some data on what it would cost to switch and estimate your savings. Finding someone you trust is critical as merchant services professionals don't always have the best reputation for integrity thanks to some in our industry that use deceptive practices and are dishonest.
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 can also be a benefit of switching your merchant account. Competition for new merchant accounts is fierce so some of the incentives that processing companies are offering include new equipment. So, if your equipment is older or if you just want new equipment, make sure to ask about that and make that a part of your switching strategy. - 15246
About the Author:
If you're serious about saving hundreds if not thousands a year in processing fees, you need to contact Brian through his website MerchantHotline.com. He's an expert at credit card merchant accounts and has been assisting business owners with their merchant accounts since 2001.
