I Got Quoted ONE FLAT RATE!

All across the web, we see “flat rates” being advertised to unsuspecting merchants. Because of this blatant misrepresentation, we then have to explain to potential customers that they’re being scammed.

Here’s the truth about the “One Flat Rate” scam!

• All banks and processors have the exact same costs from Visa, MasterCard and Discover.
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• Therefore, how can a credit card processor offer you “One Flat Rate” when Visa, MasterCard, and Discover have various rates depending on the type of business and type of credit card?

It’s like if the Federal Reserve sets the mortgage rate of 5%, and then someone says they can offer it to you for 1%. It’s too good to be true.

To prove our point: Download the actual costs from Visa that credit card processors have to pay. BE SURE TO NOTICE how many different rates there are depending on the type of business and type of credit card.

Please know that there is a much more honest way of processing credit cards.

February 15, 2012 - Category: Credit Card Processing, Exposing the Trickery

Consumer Confidence

You know as much as anyone else that in the current state of the economy people aren’t as impulsive with the way they spend their money, so why should you be impulsive when choosing a credit card processor? The credit card processing industry is multi-level labyrinth of fees and confusion that cloud your bottom line price point. Combing your way through the fine print is a painful and time wasting challenge to uncover the reality about the fees you’re paying.

Is the trickery about the credit card processing industry making it difficult to trust any of them at all?

I’ve called multiple providers myself asking for some essential information and what they tell me is always the bare minimum. Seems to me that a business owners best interest is not in mind. No wonder why business owners are becoming more and more reluctant. The processors don’t disclose any information at all about PCI Compliance or about their Non-Qualified rates. Even when I prompted about Non-Qualified transactions, they calmly said “oh, no one has told you about those?” I would only assume that they are banking on no one asking and when I say banking, I mean laughing all the way to the bank. When I asked more about the Non-Qualified transactions they flat out lied saying that it was on occasion with “international cards.” From the experience in processing, I know that rewards cards are also a big lump of these Non-Qualified transactions and would make up for at least 50% of my transactions. With processors like that, no wonder the consumer confidence has dwindled.

What I’ve found is that transparency is key, letting the consumer see all.

You have credit card processing company “A” telling you that you’ll be paying this specific low rate. Then you have credit card processing company “B” telling you exactly how everything works inside and out. At first “A” sounds cheaper, until you get your statement and find out that there were all of these surcharges, non-qualified rates and various fees. Then you have “B” whom told you everything up front and could have saved you a substantial amount of money in which you could be using to keep your doors open and thriving as a business. Let transparency restore your confidence as a consumer and put integrity back into business.

February 14, 2012 - Category: Exposing the Trickery

How to Set Up an Ecommerce Merchant Account to Process Credit Cards Online

Got an idea for a business? Here’s the good news…it’s easier than ever to launch a website and sell something online within a matter of days (if not hours)!

Business idea – check.
Product – check.
Website – check.
Accept credit cards – um….

Sure, you can sign up for a quick PayPal account, and they’ll gladly charge you a high percentage of each transaction. On top of that, you’ll have to send your customer off your website in order to pay through PayPal’s system (hoping that they find their way back to your website to finish transaction).

4 Easy Steps to Accept Credit Cards Online

1. Choose your website platform.
   Most likely, you’re going to choose a hosted e-commerce solution such as Shopify, Magento Go, or Volusion. These companies give you the tools to quickly set up a website where you can sell just about anything. Pick one, sign up, and starting entering your products.
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2. Apply for a merchant account.
   It may sound like a big deal, but it’s really quite simple. We’ll ask you a few questions about you and your business, and we’ll check your credit. Usually within 24 hours, we are able to open your account (based on approval).
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3. Obtain a payment gateway.
   When we setup your account, we’ll also make arrangements for you to obtain what is called a payment gateway, which authorizes payments for online businesses. It is the equivalent of a physical point of sale terminal located in most retail outlets. Payment gateways protect credit card details by encrypting sensitive information, such as credit card numbers, to ensure that information is passed securely between the customer and the merchant and also between merchant and the payment processor. One of the most common payment gateway companies is Authorize.net, but there are other options as well.
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4. Connect your payment gateway with your website.
   No matter what hosted e-commerce solution you choose, you’ll login to the website’s administrative dashboard to enter the payment gateway settings including the API login ID and transaction key (which are provided to you). You’ll test the system by making a sample transaction before launching your website.

Within a matter of days, your new e-commerce store will be up and running. You’ll be able to offer your customers the option of paying my Visa, MasterCard, Discover, or American Express. Don’t be overwhelmed by the process. We’re here to help!

January 25, 2012 - Category: Credit Card Processing, Small Business

3 Essentials to Acquiring a Restaurant Merchant Account

If you own or manage a restaurant, you know that there’s much more to a successful business than providing great-tasting food. Today’s customers also expect to experience high-quality service that includes a fast, simple payment process provided by a restaurant merchant account provider. No one likes standing in a long check-out line while an employee is trying to manage multiple steps in a transaction or waiting around at a table after your meal while the waiter is figuring out how to apply your gift certificate.

Efficient service keeps diners coming back time and time again.

To develop a strong customer base, you’ll need to acquire easy-to-use restaurant merchant account software and equipment that allows your staff to focus more on the food and your customers…and less on credit card payment processing. There are three essentials to processing credit cards as a restaurant…

1. Avoid three-tier pricing.
   Every week, we hear from restaurant owners who have been suckered into “one flat rate” when they were actually being sold “three-tier pricing.” When shopping for a merchant account, look for words like Qual, Mid-Qual, Non-Qual, Surcharge, Discount Rate, One Flat Rate, or Three Tier Pricing. If you see any of those words on the application or agreement, just say NO! Three-tier pricing is the worst fee structure that a restaurant could agree to when working with a credit card processing company. You’ll want to look for a merchant account provider that will pass along the Interchange Rate plus little or no mark-up.
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2. Ensure that you are PCI compliant.
   If you haven’t experienced it firsthand, you’ve probably heard of a fellow restaurant owner experiencing fraud at some point in time. Because the potential for theft is higher than ever before, PCI Complianceis not only critical…but mandatory. The Payment Card Industry Data Security Standard (PCI DSS) is an information security standard for organizations that handle cardholder information for the major debit, credit, prepaid, e-purse, ATM, and POS cards. Defined by the Payment Card Industry Security Standards Council, the standard was created to increase controls around cardholder data to reduce credit card fraud via its exposure.
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   PCI DSS requirements state that you must select an approved scan vendor to scan any public IP address that connects to or can indirectly connect to the cardholder data environment. The cardholder data environment is that part of a network that possesses cardholder data or sensitive authentication data, including network components, servers and applications. For most merchants, this means your website and your office Internet connection. However, more devices may need to be scanned as well. This is not something that is optional or to be taken lightly! In fact, proof of PCI compliance is required of all merchants who accept credit cards. Fines and deadlines for non-compliance vary depending on the acquiring bank and credit card companies you accept.
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3. Coordinate your front-end POS equipment with back-end accounting programs.
   To ensure that your customers experience efficient service, you’ll want everything working smoothly between your Point of Sale systems and your accounting programs, such as Aldelo, Aloha, Squirel, POS Value Exchange or Micros. You need a restaurant merchant account provider that will work closely with you to make sure your POS equipment integrates seamlessly and eliminates the need for double data entry and wasted time by your staff members.

There’s nothing worse than thinking that you’re agreeing to one thing and realizing that you’ve been sold something completely different. That’s why we strongly recommend that restaurant owners and managers do the homework needed in order to acquire a restaurant merchant account that’s customized to your unique needs. As always, we’re available to answer any questions and protect you from being overcharged.

January 18, 2012 - Category: Credit Card Processing, Educating on the Truth

Most Common Question: “What Exactly Am I Paying for Each Credit Card Transaction?” – Mike Hess

From time to time, we’ll post a brief interview with one of our own team members in order to tap into their wealth of knowledge about credit card processing. Because they are serving our customers on a daily basis, they have a keen understanding of practical issues that arise in the process of obtaining a merchant account. They are skilled at helping business owners cut through the confusion of credit card processing and understand how you can avoid being overcharged by sneaky companies who use trickery as a sales technique.

Today’s interview is with Mike Hess who has been part of the Best Merchant Rates team since 2008. He graduated from UC Irvine with a degree in business economics, and he is known as a sharp, hard-working team member who is a tremendous asset to our organization.

1. What is your primarily role at Best Merchant Rates?
   My role would best be described as Account Manager. I currently board prospective customers with our processing bank and perform maintenance for existing customers. I’m a bit of a jack of all trades, however, as I also jump on the phone to help with customer service and technical support.
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2. There are so many “deals” when it comes to credit card processing companies. How can a merchant possibly sort through all the options?
   There are so many “deals” in credit card processing, because every company’s goal in this industry is to create the illusion that they offer the best pricing. The truth of the matter is that most of them have a variety of ways to trick you into an unfair pricing structure. The best way to sort through the options is to educate yourself on the industry. Once you have the knowledge to sift through the nonsense, you can find a solution that’s best for you.
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3. What’s the most common question merchants seem to have regarding credit card processing?
   In my experience, the most common question merchants have is: “What exactly am I paying for each credit card transaction I process?”
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4. If you had one piece of advice to a business owner who is shopping for a merchant account, what would it be?
   Educate yourself on credit card processing as much as you can. Figure out your needs, learn the different pricing structures, look at all of the options available, and make a well informed decision. You’ll regret it if you don’t!
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5. From your perspective, what is unique about what Best Merchant Rates offers?
   What makes Best Merchant Rates unique is our approach to attracting new accounts. We take it upon ourselves as a merchant services provider to teach business owners about our industry, and we have no problem doing this because we have the most transparent and fair pricing structure around.

If you have questions about credit card processing, we’re here to help! Simply, give us a call at 866.576.5757 or submit a quick application online.

January 11, 2012 - Category: Credit Card Processing

Fight Higher Credit Card Processing Fees by Steering Clear of Fee Fighters!

After investigating Chase Paymentech, Leaders Merchant Services, QuickBooks, Costco, Sam’s Club, Square, Bank Card USA, and many more, nothing seems to surprise us anymore when it comes to the shady business practices of merchant account providers. We are happy to see that a few others are wising up and offering services to help small business owners discern what credit card processors are truly offering a good deal.

One such website is FeeFighters.com.

With a slick interface and easy-to-navigate website, Fee Fighters has created a system through which merchant account providers can “bid” on your business. On the surface, they seem to have built a one stop shop for small business owners to access transparent pricing (which usually includes Interchange plus pricing instead of three-tier pricing). They even have a fancy “take a tour” feature that explains all the bids that have been provided to you. Although we applaud Fee Fighters for their benevolent efforts, you may not realize two underlying issues with their system.

Two Reasons to Steer Clear of Fee Fighters

1. Rates and fees offered by Fee Fighters are based on your processing volume.
   As a merchant, you are asked to enter a few pieces of information in order to acquire bids through the Fee Fighters system including your monthly processing volume, average transaction size, how transactions will be processed, and the nature of your business. Here’s the secret behind their system (and most merchant account providers)…your rates and fees are based on the amount of money your business processes. If you are a small company that processes a couple of thousand dollars a month, you’ll be charged a higher rate than a business that’s charging $100,000 a month. The larger the business…the lower the rate. Wouldn’t it be great if every business received large corporate pricing? We think so.
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2. You are paying to use Fee Fighters (and you don’t even know it).
   With a line of customers showing up to search the Fee Fighters system, you may wonder why all merchant account providers aren’t throwing their name in the hat to bid on your business. Could it be that Fee Fighters actually charges credit card processors for the opportunity to place that bid? Do you realize that the companies “bidding” on your merchant account are paying Fee Fighters a residual commission if you sign up through their system? That’s right. You are the one paying Fee Fighters to use their system, and you don’t even know it!

Although the Fee Fighters website (and accompanying mission) is quite impressive, we’d suggest finding a credit card processor that doesn’t provide a rate based on processing volume or pay Fee Fighters for the chance to bid on your business. Our guess is that you’ll be quite satisfied with a better (less expensive) option.

December 22, 2011 - Category: Credit Card Processing, Exposing the Trickery

Get Your Water at Sam’s Club,
But Don’t Get a Merchant Account!

As we continue our eye-opening blog series on the trickery of credit card processing companies, we thought it was time to turn our attention to the “other” big box retailer who offers merchant accounts these days…Sam’s Club. We wanted to see if they took a similar path as Costco with their sales techniques. Frankly, we hoped that they’d step up and treat small businesses differently.

After Googling “Sam’s Club Merchant Accounts”, we headed on over to www.samsclubms.com to fill out an online application. Guess what? After 36 hours, they still hadn’t called or emailed. We’re not quite sure how these companies can treat potential customers this way and still stay in business. We didn’t want to wait around any longer, so we jumped onto their handy “chat with a consultant” feature to get the conversation going.

Asking the Right Questions to Get All the Answers
After asking for the details in the online chat, Josh provided this information and our conversation continues below…

[Josh] Visa/MC/Discover Credit & Debit: 1.98% + $0.31 per transaction
American Express (optional): 3.50%
Batch Settlement Fee: $0.00 per batch
Monthly Minimum Processing Requirement: $5
Annual Compliance Fee: $39.95
First Data Global Gateway:  $149 setup / $8 per month

[Me] I thought I saw 1.49% + .20 cents on the website…?
[Josh] You did. However that is when you swipe cards. Processing online is considered more risky per Visa/MC. Therefore, more to process.
[Me] That’s weird that the site doesn’t say that.
[Josh] It should, it probably says retail or something like that.
[Josh] It’s in the ** at the bottom of the page.
[Me] Get exclusive, low rates. 1.49% + 20¢ per transaction1
[Josh] Rate applies to retail card-present transactions with an average ticket up to $350. Some types of businesses are subject to different rates

Frankly, this is not unusual. With most all the companies that we’ve researched, they rarely advertise what you really get. They advertise the “Qualified Rate”, but they fail to mention that over 50% of your transactions won’t qualify.

Three Reasons to Avoid Sam’s Club as Your Credit Card Processor
After multiple emails and providing a SSN, bank name, account number, and routing number, this is what we finally discovered about the merchant accounts that Sam’s Club offers to small businesses…

1. Sam’s Club has a $149 “start-up” fee.
   Strike one. That’s an immediately $149 out of your pocket before you even start processing credit cards. With many merchant account providers waiving any type of setup fee these days, there’s really no reason to expect to pay one. Strike one.
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2. Sam’s Club has a 36 month contract with a $90 cancellation fee.
   Strike two. They’re locking you in for three years. Although this isn’t that unusual, we don’t think that it’s necessary anymore. Small businesses should have the right to change credit card processors if they’re being overcharged.
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3. Sam’s Club advertises one rate and fail to mention their SURCHARGE on rewards cards.
   While examining their application and agreement, it became apparent that the 1.98% that Josh quoted us was only for “qualified” transactions. This would include any credit card that was not a business or rewards card. If we processed a business or rewards card (any card that offers the consumer a reward of any type) with an Interchange rate of 2.70% (passed along from Visa/Mastercard), we would be charged the 1.98% plus the difference of the Interchange (2.70% – 1.98% = .72%) plus a surcharge of 1.49%. See the calculation below…
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   + 1.98% – Qualified rate quoted by Sam’s Club
   + 0.72% – Difference between the Interchange rate (2.70%) and the Qualified rate (1.98%)
   + 1.49% – surcharge by Sam’s Club because you’ve processed a business or rewards card
   = 4.19% – total rate charged on the Sam’s Club transaction
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   Ironically, he forgot to mention this small detail in our initial online chat. In fact, it required multiple emails before Josh was willing to share that all rewards cards get hit with the 1.49% surcharge as well. That’s typically 50% of the all transactions for a small business. STRIKE THREE.

We’re hoping that Sam’s Club will wake up to the reality that small businesses are the bread and butter of our nation and that overcharging them isn’t doing anyone a favor. Remember, there is a better option.

December 14, 2011 - Category: Credit Card Processing, Exposing the Trickery

The Dirty Little Secret of Merchant Account Salespeople

It’s no secret that small business owners loathe door-to-door salespeople who come streaming in one after another to hawk merchant accounts with the “lowest rates you’ll find anywhere!” The truth is that you’re busy running your business, and the last thing you need is an overzealous salesperson trying to talk you in to switching accounts.

• Have you ever wondered why merchant account salespeople are so zealous?
• Have you ever thought about why they persistently make so many cold calls?
• Have you ever considered that they know something that you don’t?

The reason why they’re so anxious to sell you something is because they get paid for it. Okay, well, that’s not much of a secret at all. But, did you know…?

Merchant account salespeople get paid upwards of 50% of your fees every single month for the life of your account! 

In order to pay that salesperson, the merchant account provider (aka credit card processing company) has to charge you more money through a higher rate. Where else do you think that money is coming from to compensate them for going door-to-door day after day looking for new accounts.

If you sign up for a merchant account through a cold-calling salesperson, you’ll essentially be paying them every month over and over again. Paying more for credit card processing simply because a salesperson walked into your store doesn’t make much sense, does it? Yeah, we didn’t think so.

Don’t give in to the pressure. There’s always a better option.

December 9, 2011 - Category: Merchant Account Sales

Good Luck Ever Getting Any
Customer Service From Square Up!

In our ongoing series of posts on the trickery of credit card processors, we’re setting our sights on Square (aka SquareUp.com) – which is not accredited by the Better Business Bureau. Perhaps you’ve seen their fancy, newfangled device that plugs into an iPhone, iPad, or other pre-approved mobile device. It’s touted as an easy-to-use, mobile device for small businesses to accept payments anywhere they have wireless reception.

Be warned…don’t get sucked into the cuteness of the Square card reader! 

Yes, the device looks cool and fits right on to your mobile device, but there are serious concerns about this merchant account provider…

1. Square overcharges merchants with one-flat-rate of 2.75% (swiped) and 3.5% (keyed).
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   Did you know that the industry-wide Interchange rate (passed along from Visa and Mastercard) for a debit card transaction is .65%? That means that Square is making 2.10% on every swiped debit card transaction you take. Since debit cards are the most widely-accepted card by small businesses, that means that they’re making loads of cash off of each transaction. (Just to compare, Best Merchant Rates offers .49% on top of the Interchange rate from Visa and Mastercard (.49% + .65% = 1.14% per debit transaction). It may seem like a good deal at first, but you’re really paying a lot more for the convenience.
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2. Square is prone to holding on to money for an undetermined amount of time.
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   Merchant Maverick has done a great job outlining the ways that Square can prevent you from accessing your own money:
   
   • $1000 new account limit: If you process more than $1000 in transactions per week as a new Square user, anything above that $1000 will be held for an undetermined amount of time. Usually, until they verify that you’re not a fraudulent company. Once they verify, they’ll upgrade your payout schedule to reflect a higher limit. The verification process can be initiated by yourself (recommended for faster turnaround), or Square. Either way, until you’ve been upgraded, expect a delay in receiving any funds over $1000.
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   • $1000 card-not-present limit: If you process more than $1000 in card-not-present (CNP) transactions per week, anything above that $1000 will be held for 30-days. Similar to the new account limit, merchants can apply to have the CNP limit raised as well.
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   • Withholding of funds for high dollar transactions: Big ticket transactions may throw up a red flag with Square’s underwriting department. If that happens, then they may hold those funds for an undetermined amount of time. Make sure you let them know ahead of time if you plan on processing high dollar transaction amounts.
   If you want to hear directly from consumers, read more complaints here.
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3. Square is notorious for not providing customer service.
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   If you’re not convinced already, you should read through some of the complaints about their customer service. Go ahead and try to find a phone number on their website. I dare ya! Couldn’t find one, could you? That’s one of the biggest complaints people have about Square is the lack of access to a real person and the delays in hearing from someone via email. Here are just a few examples we found…
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• Jerica states, “Square has NO customer service if you have an issue (which i have). They only provide you with an e-mail address which they dont respond to. my hair dresser uses square and square charged me the payment which i owed him plus two bogus charges of $140 each back to back . . . ive seen alot of complaints from several different square users with the same issue as i have. i would NOT ADVISE ANYONE TO USE SQUARE!”
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• Benjamin says, “Square Inc. = NO CUSTOMER SUPPORT! I’ve only had two transactions so far, and I’m running into trouble with my Square Inc. account, and there is no number and no email for customer support. I’ve combed their site and the internet and there is NOTHING! Lame-sauce!”
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• Mitch commented, “Great idea. Lousy company. I tried Square Up. I did three transactions, had a problem with one. And that’s when I learned they have no customer support. They say they will respond in 24 hours, they did, by assigning me a number and asking for account info. That was the last I heard from them. I’ve emailed them almost every day for going on 2 weeks. Nothing. But they collect their fees real well. Just hope you never need to communicate with them. I think it’s little more than a boiler room operation.”

Beyond the major concerns above, be aware of the inherent challenges in working with a wireless and paperless system. If (or should we say ‘when’) you don’t have access to a wireless signal, the Square device and app are completely worthless. On top of that, many people want a paper receipt rather than one sent to their email. Square doesn’t have any way of providing that to your consumer.
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Square may be a good solution for you if you don’t accept transactions very often, don’t need customer service, and aren’t concerned about how long it takes you to finally get your payments to land in your bank account. Thank about it. There’s always a better option.

December 1, 2011 - Category: Credit Card Processing, Exposing the Trickery

Listen to the Masses About
BankCard USA – RUN AWAY!

In our ongoing series of posts where we expose the trickery of the credit card processing industry, we contacted BankCard USA (aka Maverick BankCard USA Merchant Services) to request more information about opening an account. Although we could have listened to all the negative reviews online, we just had to see the evidence for ourselves. Before you read what we discovered, check out what the masses are saying…

• Better Business Bureau - 76 complaints with BBB in last 3 years and 28 in last 12 months.
• Trustlink – 8 out of 13 reviewers only gave them 1 star!
• Ripoff Report – 25 negative reports that are definitely worth reading.
• Complaints.com – tons and tons of complaints.
• ComplaintsBoard.com – wanna read even more complaints?

After giving BankCard USA two full days to respond to our online inquiry, we gave up on the waiting and finally gave them a call. We had a quick chat with Ryan who indicated that he had been with the company for over 12 years. He was quite professional and knowledgeable in his presentation. We told him that we were looking for a merchant account that would process transactions through our website, and he promptly offered to email us an agreement to review. (Download BankCard USA agreement here.)

Here’s what we discovered…

1. BankCard USA advertises a low rate that you’ll rarely (if ever) qualify for.

   This is one of the dirtiest tricks in the industry…advertise a low price to uninformed merchants and never educate them on what they’re really going to be charged. We noticed the low rate of .49% on Qualified transactions, and we know that merchants would easily believe that this is a great deal.

   

   Click the image to a full size version!

   We emailed Ryan and asked, “What percentage of transactions will be charged the .49%?”
   His response was, “The 0.49% rate is for all Visa MasterCard credit/debit sales.”

   This is a complete and utter lie! If we’re processing transactions over the Internet, there’s no possible way it will qualify for that rate.

   So, we emailed him back with, “I guess I’m a little confused, because I see several rates. Will all our transactions be at the .49% rate?” He responded with, “Yes, the 0.49% rate is not for all cards. Please call me.”

   Oh, so now that we ask deeper questions, he’s back pedaling on his initial lie. Do you see how this works?

   Here’s the truth: Credit Card transactions over the Internet NEVER QUALIFY for the lowest rate, but BankCard USA doesn’t tell you that. If you sign up with BankCard USA and process credit card transactions over the Internet, you’ll be charged 2% + the Interchange Rate which is passed along from Visa/Mastercard (Debit Credit Cards .95%, Basic Credit Cards  1.50%, Rewards Cards 1.75%, Corporate Cards  2.00%). That means you’ll be paying up to 4% on those transactions…WAY MORE than they lead you to believe!
   

2. BankCard USA requires a 3 year contract with a $199 cancellation fee. 

   The 3 year contract isn’t shown anywhere on the agreement that was emailed to us. We had to ask twice via email in order to get that information. Wanna know where that is stated by BankCard USA? It’s found on page 17 of the 39 page BankCard USA Program Guide and states, “The initial term of this Agreement shall commence and shall continue in force for three years after it becomes effective.” They finally told us how long the contract was and attached the Program Guide for our benefit. How many merchants sign up without ever asking how long they’ll be locked into this agreement?

• Freezing accounts and holding funds indefinitely.
• Horrible customer service after they’ve signed up.
• Overpriced terminals.
• Deceptive terminal agreements.

Frankly, our blood starts to boil when we read what merchants have endured at the hands of BankCard USA. Listen to the masses and RUN AWAY! Don’t ever go near BankCard USA and their deceptive trickery. There’s always a better solution.

November 22, 2011 - Category: Exposing the Trickery