Whether you run a local mom and pop shop, a large corporation, or something in between, the need to accept various card payments rather than just cash is essential at your place of business—both in-store and online.
Whether your merchant account provider is your bank or another, unaffilated one, you may not know how much money you’re leaving on the table. In fact, many business owners don’t know exactly what they are paying for. Yes, they understand that the account’s purpose is to obtain credit-card processing solutions and services to make the payment process easier and more secure for their customers. But their confusion lies in the rates and fees and the unclear codes that accompany them on their merchant statement.
Unregulated and Unclear
Because the merchant service industry is unregulated, providers have the power to charge their clients whatever fees they wish. Many are necessary, such as authorization, transaction and batch fees, but others are thrown your way without much of a purpose. These hidden credit-card processing fees are oftentimes right in your field of view; you just don’t realize that they aren’t needed. They’re presented as “pass-thru” costs or required fees, and they just might not be.
Service packages are just one example. Your provider may claim that certain service packages are comprised of additional features that will further benefit your business—like free terminal paper or more timely service. But many of these programs have only a negative impact because you wind up spending more money each month for a service that doesn’t offer anything more than what your merchant account should already provide.
While some fees are completely unnecessary, others take more money from you through high rates. It’s easy to miss. You expect the fee to show up on your bill—your provider may even take the time to explain to you what the rate is for—but it is much higher than it needs to be. When you’re doing business in an unregulated industry like merchant services, anything goes, and the consequences to your bottom line can be severe.
But how would you know any of this? You probably wouldn’t if you didn’t take the time to ask questions, conduct your own research, or look elsewhere for another provider.
How to Learn More about Your Credit-Card Processing Fees
You can learn more about the different credit-card processing fees that appear on your statement. With just a few clicks of a mouse, you can find out more on the internet. But sometimes you don’t know what you’re looking for or you don’t understand the explanation. If understanding your credit card processing statement was that easy, everyone would do it.
Even if you already have a merchant service provider - and even if you just signed up, there’s no better time than right now to really explore your options. Find out what different providers are willing to give you and what they’re expecting in return. Don’t feel rushed to make a choice. Meet with multiple providers and hear what they have to say. If you feel that they’re not being totally transparent with you, then that is a major red flag. But you may come across a couple service providers more than willing to answer all your questions and educate you about the industry rather than pressure you into making an agreement.
A different provider can look at your most recent credit-card processing statement and pinpoint what fees are invalid and where your current provider has needlessly hiked up your rates. If you can figure out a way to cancel your current account then you’ll be able to switch providers and get the best deal you deserve. Sometimes, even if you are under a contract (three-year term and an early termination fee of $500 are industry standard), a new provider can supplement the cost of terminating to get out of your undesirable situation.
Think you're paying too much in credit-card processing fees? Find out how MPX can help.