Want a lower merchant account rate?
Buy direct and avoid the middleman!
We've all heard the expression "Avoid The Middleman" to keep cost down. This applies to credit card merchant services a well. In this context, the unnecessary middleman is your local banker who probably has not gone out of his way to clarify the common assumed misconception that they are part of your credit card processing mechanism when in fact they are not beyond the initial referral stage.
Lets be candid for a moment. There's something to be said for the value of staying within one's comfort zone. If using your local banker as the middleman regarding your business merchant credit card processing services is your comfort zone and you don't mind paying dearly for it, there's nothing wrong with that.
You should, however, be aware of the true relationship between your banker and your credit card processor, as well as the financial consequences to you of this implied relationship. With very few exceptions, contrary to what you may assume, here are the facts of most bank/processor relationships:
- Your local bank usually does not own, operate, manage or in any other way involve itself with your merchant processing provider. The relationship is usually strictly a middleman referral relationship in which the bank refers you onto a processor in return for a bonus and/or a piece of the profit action. From that point on, the bank has secured their long-term referral bonus payday at your expense by virtue of their initial middleman referral of your account to the processor with no additional benefit or service to the Merchant.
- Your local banker probably is not qualified to competently quote processing rates, make underwriting decisions, or in any other way offer advise concerning credit card processing. Your local banker is an expert in commercial banking which has absolutely nothing to do with credit card processing.
- Your local banker does not oversee, nor is it in any way involved (other than depositing your settled batches into your account with that bank) with your day-to-day credit card processing activities.
- Contrary to what may be inferred, you almost certainly are NOT enjoying the benefit of preferred or lower discount rates by virtue of patronizing your bank with your merchant processing account. To the contrary, because the referring bank takes a big chunk of his profit, your processor is forced to charge you more than you would be paying had you contracted directly with the processor instead of via your banker by virtue of your having unnecessarily inserted an additional middleman into the overhead equation. Obviously someone has to absorb the bonus and commissions the processor is paying to the bank. That means YOU the Merchant.
- This one is kind of nasty, but unfortunately it happens a lot. You should never let your banker hint that your business line of credit, loan interest rate, chances of being approved for a loan, or anything else of this sort, will be affected, approved, or terminated based on whether or not you do your credit card processing through the 'bank's program'. This is financial blackmail. The very idea that you are being forced to permit yourself to be gouged on one end as a condition for getting a good deal on the other end should not be tolerated. If this is what you're hearing from your bank, it's time for you to start looking for a new bank.
With that explanation out of the way, lets get down to business and answer the question: Where does one find the best Merchant Credit Card Processing Deals As you may have guessed by now, the best method is to bypass the referral source entirely and go directly to the ACQUIRER. There are several effective ways to accomplish this: - This site offers many recommendations for quality well priced credit card processing programs underwritten through well know legitimate Acquirers.
If you are interested in an excellent program underwritten by HSBC Bank of Buffalo, NY via North American Bancard that includes free equipment, click here:
HSBC Free Equipment
If you are interested in one of the few Acquirers out there that has zero Early Termination Fees (meaning you can sample it and change your mind anytime without penalty--an ideal starter program if you're not sure credit card processing will benefit your business--here's a program underwritten by Intuit, the makers of Quicken and Quickbooks software. It even provides you with a free copy of Quickbooks Pro 2007 software, a $199 value. Click here
Quickbooks Merchant Services
- Referrals from other Merchants are always an excellent source. If the processor has been upstanding and dependable for one Merchant, chances are he will treat you the same way. One caviat: Ideally, make sure the referring merchant is a business type similar to your business. For instance, if you are face-to-face retail, a processor referred from an internet business may or may not be a good fit.
- You can always find listings of potential processors in the yellow pages and via mail and telephone solicitations you are bound to receive. Just be careful to review the "Top Ten Mistakes" section of this website prior to signing on the dotted line.
Go to "Top Ten Mistakes Merchants Make"
- Your accountant or CPA might be a good source for a dependable Merchant Services Credit Card Processor.
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