Merchant Services Terms and Services, are never non negotiable. The providers want their customers to be happy and processing! There are many companies out there, member bank’s and Iso’s who want to process for merchants. It is best to be well informed, and know what you are looking for before shopping around for services. Here are a few key points one may want to look at or ask for when shopping around for better merchant account rates.
Firstly, one must realize it is not just the rate you are paying for, and also those rates are subject to industry minimums (interchange). So, when the rate battle is lost before it’s fought, there are other aspects of the service where one could save themselves some money before negotiating the final contract.
- Mid and Non Qualified transactions. The credit card companies charge the merchants different rates for different types of cards customer’s use. Naturally, the credit card companies issue more of these cards, so it is likely that the mid and non qualified rates is what one would be paying more often, so it’s on these specific rate fee’s where one is advised to bargain.
- Authorization and Processing fee’s. These fee’s are a reality. Every service provider will have either an electronic funds transfer fee, or push fund, essentially a charge for issuing transactions on top of the rate. This can be negotiated as it’s often chalked up as 100% profit for the provider. Asking for “zero” is never functional, but asking for something less than what is offered, is acceptable and this is one of the fee’s they can alter to gain your business.
- Statement Fee’s. Again, every provider charges something, even if it’s lumped into a Monthly Service Fee. And again, this is one of the 100% profit margins for the provider so, just as in our prior example, this is a suggested point of negotiation to bring down your monthly costs for merchant services.
- Monthly minimums. These are usually 10-20 dollars a month, and can be negotiated. It is less likely that they will able to do nothing, but 10.00 is an industry standard, one could draw upon any provider to cut the minimum down, but not out altogether, again, asking for nothing will get you nothing~!
- Rental/Additional Hardware fee’s. As a merchant, you should be either purchasing the terminal one time out right, or renting/leasing the machine depending on what is comfortable. In the instance of renting/leasing, there is room to request decrease in the price offered. When a terminal is purchased, be clear that there is no Imprinter fee’s or any other costs associated with monthly processing.
- Guarantee of Terms. The discount does not always lie in pricing alone. Be sure to negotiate any terms of service you are uncomfortable with. One can often get decreases in cancellation fee’s, de activation fee’s these do not save money up front, but rather provide a security blanket of sorts, knowing that no unexpected fee’s can creep up later.
- Early Termination Fee’s. No provider wants to get into an agreement, with the merchant asking about termination fee’s. The reality is, a merchant’s rates are approved under the assumption that the provider will gather a good 4-5 years worth of business, to make the rates justifiable. These terms are set by Visa and Mc and can still be negotiated. Again, like number 6, it is not money saved up front but rather security in knowing that they will not likely occur, and if they do it is affordable for you.
It is always best to address these issues in a calm tone, if you are dissatisfied with the offers, seek out another provider; there are enough that one of them will meet your needs!
