4 Red Flags that Let Your Know Your Merchant Account Provider is Ripping You Off
There are a lot of predatory practices that go on in the merchant account industry. However, if you do your homework and educate yourself on the process, you can steer clear of shady, unscrupulous merchants.
There are 4 major red flags that you should be aware of :
#1 Review Your Statements!
Many merchants simply glance at their processing statement, assuming they’re correct. However, the people keying in your information do make mistakes. Make sure you carefully look over your statement every month, as there are many cases of egregious errors, and merchants overpaying by hundreds of dollars.
If you don’t have time to review your statements, seek professional help from a CPA or someone familiar with the industry. Be sure, however, that the person you contact is not directly affiliated with a processing company or receiving any kind of kickback.
#2 Look at More Than Just Your Rates
Many merchants get sucked into a very low rate. What they don’t know is if their rate is exceptional, it’s probably too good to be true. They’re then hit with exorbitant monthly and annual fees, completely eliminating any savings that the lower rate may have produced. And in many cases, they end up paying more.
#3 Your Merchant Account Provider Lowers Your Rates Without You Asking
If your rates are magically lowered, you’re probably grossly overpaying. Your provider may have lowered your rates for a few reasons. They may have placed you on a new tiered pricing plan that they were forced to implement because of buzz in the industry. Your provider makes less money but they’re still hugely profitable. And more importantly, their clients are happy, feel important, and are not likely to look elsewhere for their processing needs.
#4 You signed up for your processing through a member warehouse or office supply store.
This is not to say that processing by these companies is subpar or you are getting ripped off. However, these companies have profit sharing agreements with merchants, and are not doing the processing themselves. In the end, you still have to do your homework.
Being careful to choose the right processor can end up saving you thousands of dollars. The wrong processor will rob you of your hard earned money that could have been put back into your business. Arm yourself with knowledge so that you can make the best decision for you and your business.
debt is a major problem and every one wants to manage their finance .. You shared great tips.. keep sharing
Hello,
Nice blog. Merchant accounts are contractual agreements between a participating bank who extends a line of credit to a merchant. This allows businesses to accept payment for goods and services from credit cards. I would like to tell you that you have given me much knowledge about it. Thanks u….