Canadian Merchant Associations
No matter what industry you are in, you can bet there is a merchant association that exist which you can join for a membership fee which promises you a boatload of benefits at the cost of a membership fee. The main selling feature of these merchant associations are the negotiated merchant fees packages which are available to their members. But are these negotiated rates worth it or can you negotiate these rates on your own?
A couple of things you will need to consider before making the decision to join a merchant association. First, the membership fee. The membership fee will differ from association to association depending on it’s size. But the fee can also differ within an association depending on the size of business you are. This membership fee can typically range from $300 to $500 a year and it is a fee that you will need to pay every year you wish to be a member.
When doing your research, pick the association you wish to join. While it goes without saying, be sure to pick one that suits the industry you are in. Some of the largest in the country are the Retail Council of Canada (RCC), The Canadian Federation of Independent Businesses (CFIB) and The Canadian Restaurant and Food Association (CRFA). These associations are the largest in the country which means they also have the most “buying” power. These are the associations who are able to negotiate the best merchant rates for their members due to the size of their membership base. If you are going to join an association, these should be the first you take a look at.
If you’re a new merchant, then it’s pretty much a no brainer. Join the association and pay the membership fees because along with the lower merchant discount rates, you will also have access to negotiated lower rates for such items as advertising, supplies and other benefits. Join for a year and after the first year, assess how much you took advantage of the benefits. Then you can make the decision on whether or not to continue your membership.
If you are an existing merchant, the line of joining an association greys a little more. Here is where you will need to take out your calculator and do some math. First, take a look at the largest benefit, the merchant discount rate. Look at your existing rate and what you currently have with your acquirer. Now take a look at the rate included with the package. Use your last year’s sales and calculate what you would’ve paid in fees with the association’s rate versus what you did pay. At the very very least, the difference needs to come very close to the membership fee in order for it to be worth while. If not, call your Acquirer and ask to speak with their retention department. See if there’s an ability to lower your existing rates based on increased sales and low chargebacks. If the difference comes close, take a look at the other benefits the association offers. Will you actually take advantage of these other benefits? If so, then join the association.
The last benefit of an association is it’s lobbying power. These merchant associations have been very successful in the past in lobbying on behalf of it’s members for merchant rights. And while the benefit is intangible, by being a part of these associations, you are armed with the knowledge of what’s going on it in the industries.
Joining an association will ultimately be a personal decision based on what is right for your business. But be sure to do your research before making your commitment. For more information, call the association directly and ask to speak with a membership coordinator. They will be able to give you all the details of what’s included in your membership package.
