Once you start processing cards you might start to realize that this is not the most honest industry. There are several questions that arise during this process “ Why only a few providers show rates on the website? “Why there are several rate structures? “ etc.
Here are some tips to help merchants avoid the pitfalls of the credit card processing industry. This will help you understand the tricks used by the payment processing industry in a better manner.
- Teaser Qualified/ Non-Qualified rates:
You might have noticed several payment processors advertising “as low as” 1.00%. There are no advertising standers for the payment processing industry and thus few processors hide the entire fee structure. They won’t disclose assessment fees, mid-qualified and non-qualified charges tacked on top which is easily ignored by the merchant.
An example of this is flight sale for 49$ and did you end up paying 49$ by the time you check out the amount will be way higher than 49$. You end up paying all sorts of extra fees. Most processors hide these fees in the fine print and most of the time merchants never notice it until it’s too late.
- PCI Compliance Fee:
This is nothing new. Many processors have started charging PCI fees. They might charge you annual, quarterly, or monthly fees. Few payment processors call this Security fees. Unlike some other processors, iPayTotal fees are crystal clear we never hide any fee from the merchants.
- Annual Fees:
This can be really tricky. There are few processors that charge monthly fees and some annual fees. The usual range of the fee will vary depending between 50$-200$. And this might not be noticeable by the merchants. And since it’s charged once a year the merchant might not even bother to check if he has high transactions in the account. The terms wherein the fees are charged is “IRS Reconciliation”, “PCI Compliance” or simply “Annual Membership” fee.
- Monthly Fees:
New businesses get hit really bad by monthly fees. It’s not that small businesses are not valued. It’s kind of penalizing them for not processing enough. Small business merchants will realize suddenly that their low monthly fees are not low rather it’s quite high.
Processors show the “ monthly minimum” in the total fee section. This will be under Visa/ Mastercard generated transactions which means that if the merchant does not process enough payments there will be a fee. This will be marked as low achiever fees by few processors.
- Termination fee:
You need to read through your contract word by word if you have the time. If not ask someone else to go through the contract for you. Few processors have termination fees or cancellation fees. The payment providers will implement a long term contract instead of providing a good service at a good rate to bring profit in your business. They do this in order to keep the merchant in some way so that they won’t switch to an affordable provider.
iPayTotal can assist you in creating your high-risk merchant account and provide you with customized credit card processing solutions. We can guide you through the banking underwriting process.