How Processing Fees Stack Up

Check out how Best Merchant Rates differs from other merchant account providers.
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February 1, 2013 - Category: Blog, Credit Card Processing

How to Start Accepting Credit and Debit Cards for Your Small Business

Whether you’re starting a business from scratch or simply wanting to expand your business, accepting credit cards is one of the best decisions you can make. Not only is it widely known that your business is missing out on sales if you’re not accepting credit and debit cards as a form of payment, but the United States Small Business Administration also notes…

“The convenience of using credit cards generally increases the likelihood of consumer “impulse purchases,” which ultimately contributes to an increase in a business’s average sale. Customers are more likely to make these purchases if they have access to credit or their available bank account funds.”

Acquiring a merchant account from a reputable credit card processor can be a daunting task for any small business owner, but we want to outline an easy step-by-step plan that will guide you from start to finish.

1. Educate yourself on the fees associated with accepting credit and debit cards.
   There are a number of terms that are unique to the credit card processing industry, and you’ll need to be aware of what they mean. From “qualified” to “non-qualified” to “three-tier pricing” – all of these phrases have special nuances within the industry, and you’ll want to know what they mean in order to protect yourself from being overcharged.
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2. Determine how you will accept credit and debit cards.
   Before contacting a merchant account provider, take a few minutes to estimate how many of your transactions will be in-person (with the credit card swiped), over the phone (without the physical credit card), over the Internet (through your website), and via a mobile application (such as an iPhone, iPad, or Android device). There are three figures that you will be asked about – the % of your transactions for each method, the total monthly transaction totals ($), and the average transaction amount.
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3. Contact several merchant account providers to compare overall pricing.
   Notice that we didn’t say to “compare rates.” The rate game is a tool of trickery that most every credit card processing company plays in order to lure you in to get your business. The overall pricing structure is what to look for! The bottom line is that you want to avoid any merchant account provider that offers you “one flat rate” or “three tier pricing.” You want to look for someone who provides what is called “Interchange Plus” pricing. These accounts are based on the “interchange” tables published by both Visa Interchange and MasterCard Interchange. This type of pricing creates a discount rate by adding interchange rates, fees, assessments, markups, and other costs. By the way, don’t settle for a simple email with a few rates. BE SURE to get the full contract so that you know exactly what you’re agreeing to.
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4. Seek a trustworthy source to help you compare the quotes and fine print.
   In an effort to educate small business owners, we recently started offering a no-obligation review of competitor quotes. We will walk you through exactly what the quote means to your bottom line and ensure that there’s nothing hidden in the fine print that will pop up a few months down the road. If we can’t save you money, we’ll let you know right up front.
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5. After determining the best overall pricing for your company, fill out the application.
   Most companies will pressure you into filling out an application from the very beginning. They figure you won’t want to go through that process more than once, and they’ll have you locked in. Get the contract upfront, do your research, and then fill out the application after you’ve determined which merchant account provider is best for you.
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6. Start accepting credit and debit cards within 24-48 hours after approval.
   This is the simplest part of all. Whether it’s through your existing credit card terminal, through your website, or via a wireless device, you can generally be accepting credit cards within a couple of days. If you choose Best Merchant Rates, we walk you through the process every step of the way, and we’re available 24 hours a day.

Accepting credit and debit cards for your small business has never been easier, and Best Merchant Rates is focused on protecting small businesses from being overcharged.

May 28, 2012 - Category: Credit Card Processing, Educating on the Truth

Merchant One is #1 in Shady Sales Strategies

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As we continue to expose the trickery of shady credit card processing companies, we contacted Merchant One to request a quote for an Internet-based business. As with all our merchant account reviews, we contacted the company directly by submitting an request for quotation through their company website.

We submitted a request on Tuesday, April 24th, and we received an automated email response that indicated “we look forward to speaking with you.” No calls or further emails were received. We left TWO MESSAGES, but NO ONE CALLED US BACK. Finally, on our third call, we were able to speak with a “live” person, and they asked us for more information.

As with all the other companies we’ve reviewed, they never send the full list of rates and fees from the beginning. They send a “salesy” email with the lowest Qualified rate and hope to lure you in (click image to download the pdf they emailed us). We finally received the full contract that helped us see that they’re just like all the other shady companies we’ve reviewed. By looking at Merchant One’s full agreement and other online reviews, here’s what we’ve learned.

Four Reasons to AVOID Merchant One

1. Merchant One will sell you on the lie that they’re a “direct processor”.
   The customer service representative kept going back to this over and over again, and it’s just not true. They are an ISO (Independent Sales Organization) and MSP (Member Service Provider) for both Wells Fargo Bank and First National Bank of Omaha. Look at the bottom of their website or any paperwork. The Merchant One rep kept telling us that we’ll get “so much better customer service” because they are a director processor. I’m not sure I would want to process my payments with a company that blatantly lies about their identity.
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2. Merchant One has a whopping 188 COMPLAINTS through the BBB within 36 months.
   We have no idea how the Better Business Bureau can justify Merchant One’s “A+” rating when there are an overwhelming amount of issues with their business. 125 of those complaints were because of “Advertising / Sales Issues” which doesn’t surprise us in the least.
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3. Merchant One sells a rate of 1.19% online but FAILS to mention their surcharges.
   Instead of simply telling the truth, Merchant One advertises their “Qualified” rate of 1.19% (retail) or 1.99% (Internet) for which only 10-20% of all your transactions will qualify. They fail to mention the “Mid-Qualified” and “Non-Qualified” surcharges that 80% or more of transactions will receive. Typically, these fees will cost you a full 1-2% more per transaction. On top of the high rate, they will also charge you $.40 per Internet transaction ($.20 for authorization plus $.20 for gateway). It’s not surprising that many of the complaints online about Merchant One revolve around the provider’s misleading sales tactics.
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4. Merchant One CONCEALS their PCI fee in the fine print.
   PCI Compliance is now mandatory for all businesses that process credit cards, but many merchant account providers are anxious about educating merchants about the costs involved. Merchant One is no different. In fact, they hide their $129 annual PCI Compliance fee in the fine print of their agreement, and it’s no where near all the other rates and fees. You’d have to scour the document in order to find it.

One reviewer gives Merchant One a “D”, and another reviewer rates them 2.5 out of 5 stars. Based on the evidence, we consider Merchant One “#1″ in the category of “Shady Sales Practices.” There is always a better option.

May 4, 2012 - Category: Educating on the Truth, Exposing the Trickery

National Bankcard MISLEADS You Into Thinking You’ll Get 0.39%

Click the image to view National Bankcard's REAL rates and fees!

We’re always amazed by what extent our competitors’ salespeople will go to in order to land a new merchant account, and National Bankcard is no different. Their misleading sales tactics motivate us to continue exposing the lies and trickery of credit card processing companies. We know how difficult it is for small business owners to thrive (or even survive) in the current economy, and companies like National Bankcard aren’t making it any easier.

As we have in the past with Costco, Bank of America, QuickBooks, Chase, Merchant Warehouse, and many others, we simply entered contact information into the “get a quote” form and waited for them to contact us. We immediately received a sales email and a request for a phone conversation.

After articulating that all our business would be conducted online, the sales rep sold us on the fact that we would get 0.39% on qualified, debit card transactions and went ahead and estimated the fees on a $100 transaction. Of course, this would sound great to an unsuspecting merchant who isn’t fully informed about the reality of what was being offered. To give National Bankcard a chance to come clean with the truth, we asked them to email us a quote with the information that was shared over the phone, and this is what we received…

Stationary Terminal ……Authorize.net
Monthly Service fee…….$9.95
Gateway Service. $9.95
Month-Month Agreement
NO TERMINATION FEE
NO SET-Up Fee
Debit rate………………….0.39%
Credit rate (Qualified)….2.19%
Credit rate (MID- Qualified)….2.19%
Authorization fees. 19 Cents
Batch fee- 35 Cents
24 hours 7 days a week customer Service and Tech Support

After several emails back and forth encouraging us to fill out an online application (without seeing their full contract), we finally got the sales rep to email us a pdf copy, and this is what we discovered.

Three Reasons to Avoid National Bankcard and Their Misleading Sales Practices:

1. National Bankcard salespeople will MISLEAD you about the rate you’ll be charged.
   While the sales rep was quick to sell 0.39% as the qualified, debit card rate over the phone, the TRUTH is that an Internet transaction would NEVER RECEIVE THIS RATE, because the card is not swiped. Click here to download page 10 (out of 11) of their contract to see the real rates you’ll be charged. For a qualified Internet transaction (which doesn’t include any rewards or business cards), you’ll be charged a much higher rate of 2.19% + .19. If a customer uses a card with any type of rewards program, the transaction will be deemed non-qualified, and you’ll receive a surcharge of 1.49% + .10 which equals a total of 3.68% + .29. That’s a far cry from the 0.39% that they were selling us – OUCH!
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2. National Bankcard NEGLECTS to tell you about a $79/year PCI fee.
   As we’ve noted in the past, PCI compliance is mandatory for all merchants, but many credit card processors don’t want to scare away potential customers with a large yearly fee. National Bankcard simply left it off their initial email quote and it’s no where to be found on the contract. When we emailed the sales rep to inquire, he disclosed that there was a $79 yearly fee, but he wasn’t sure if it was on the contract or not. Don’t you think it’s a little weird that National Bankcard leaves off a $79/year fee off their contract?
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3. National Bankcard automatically enrolls you in their UNNECESSARY ”My Biz Perks Program” at $11.95/month.
   Notice the box on the bottom of page 10 of their contract. It states, “I understand and acknowledge that I will be automatically enrolled in a 60-day free trial of the My Biz Perks Program, which includes custom reporting and alerts, supplies, extended warranty, overnight replacement on equipment, partner discounts, and more!” You can’t opt-out of this in the application…you have to go the extra step to call or email after the 60 day free trial is over. Hoping that you’ll just forget about this fee, National Bankcard is simply taking money out of your pockets each month with little or no service offered in return.

Why would you want to process credit card transactions with a merchant account provider that MISLEADS you from the beginning of your relationship? It just doesn’t make sense. Don’t fall prey to trickery of National Bankcard. There’s always a better option.

April 27, 2012 - Category: Credit Card Processing, Exposing the Trickery

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