Canadian Merchant Accounts – 8 Questions You Need to Ask!
October 29, 2008 by Matthew Hunt
Reading the current article top to bottom will give you an excellent understanding of Merchant Account Services in Canada.
In this day and age, it can be difficult to find a Credit Card Processing supplier that offers it “ALL“, finding one single provider that is the “best” at everything just doesn’t exist.
Merchants need to be practical and smart about making merchant account service decisions, you need to think twice before coming to a final decision or you may find yourself stuck with an agreement that may not be “right” for your companies merchant account needs.
Here is a valuable list of questions you want to ask yourself before applying for merchant account services are:
1. What will be my average sale amount per customer?
This will determine your Discount Rate on credit cards.
2. What will be my expected monthly business sales volumes on each card?
This also helps determine your discount rate on credit cards. The usual rule of thumb is: the lower your average sale amount and the higher your sales volume the lower your Discount Rate will be.
Now don’t make fake numbers up when applying for credit card processing account(s) to try to acquire lower rates. The credit card processor will realize your transactions are not what you claimed them to be on your initial application. In result, they will jump your Discount Rates ASAP and/or put a hold on your funds, in case of plausible chargebacks. A Merchant Account supplier can hold your money for up to Dozen months too, so being completely transparent about your business’s transactions and volumes is exceedingly important.
3. How do expect to process transactions? Face-to-face, over the phone, fax, mail-order, internet?
This tells the merchant account providers your “risk” value. Card present transactions are considered the lowest risk while any type of transaction that falls under the MO/TO (mail-order/telephone-order) umbrella as being the highest “risk” for credit card fraud. This affects your credit card Discount Rates.
4. How many transactions do I expect to do a day?
This will tell you what type solution you will need and how you should connect that solution. For fast transactions you will want to connect via the high-speed internet.
5. Will I have peak times that require speedy transactions?
Similar to as above, but you may want to have two Credit Card Machines for busy times to increase check-out speeds. As they say. “Time is Money!“
6. Is there a mobile or trade show factor to my business?
You may require a wireless machine to fulfill your mobile components to your business.
7. Is my business seasonal?
If your business is seasonal you can save yourself a lot of money by applying for a seasonal credit card processing account. Basically, during your off-season you will have zero fees. Allowing you to only pay when you need the services as opposed to applying for a regular merchant services account and being charged for minimum processing fees during your off-season.
8. What types of cards do I expect to receive? Consumer cards, business/corporate cards, international cards?
This important to know for two reasons. One being, that you will not be surprised by your “Mid-Qualified” and “Non-Qualified” fees. These fees are charged on top of your “Qualified” Discount Rates.
Two being, you will know to ask how the merchant account company structures their “Mid’s” and “Non’s”. By knowing this you may find out that one company is less expensive then another after knowing their “Mid’s & Non’s” if a lot of your transactions fall under those premium rates. Do not expect a merchant account company to be transparent about these rates. They make their money by what you don’t ask.
By knowing how your business will handle payment processing, will enable you to provide the ‘right‘ info to your merchant account sales rep, so they can best recommend the proper solution for your business needs.
If you do not ask the ‘right‘ questions then you risk finding yourself in a merchant account agreement that does not fit your business needs.
If you liked this post and want a even more in depth look at merchant accounts you may want to take a couple of minutes and read this FREE report titled, “The Critical Payment Processing Guide for Canadian Merchants“
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