Making Things Worse: Payment Processing Providers Use Ethically Deceitful Marketing Tactics
I have been disgusted with the unethical marketing tactics many merchant account providers have taken to secure more clients. I am seeing payment processing companies tread thinly on the legal line with misleading advertisements/flyers. Often important details are omitted, leaving merchants to discover hidden fees in their statements and then having to pay huge cancellation fees to break their agreements.
Many merchant account providers advertise below-cost rates, then turn around and pad accounts elsewhere with ridiculous back-end fees. They have chosen to play the game of “If they don’t ask, then we don’t tell.“
This is flat out wrong.
I have said this repeatedly: the companies that are playing this shady game are risking a lot. Merchants are consumers too and in this day and age-with the internet such an easy place to share personal experiences to potentially huge audiences-they have a means to fight back!
Look what I found after just a few short searches on some Canadian small business forums:
These are just a couple of examples of merchant accounts gone bad-really bad. There are hundreds of complaints found all over the internet where merchants are complaining about the same themes. For those companies that continue to try and make sales using misleading advertising, and by not sharing all the terms and conditions…well, let’s just say: their day of reckoning is coming.
I understand that there will always be disgruntled customers out there ready to complain at the drop of a hat. But these types of problems are not atypical: they are a common experience I have witnessed firsthand with so many merchants.
Why do these companies put their reputations and long-term credibility with customers at risk? Personally, I don’t understand this type of thinking or marketing!
A good chunk of my business is helping merchants cut their fees by switching them to new merchant accounts with competitive rates, because they were not explained the full details of the agreement they signed with the previous company.
Everybody understands there are costs to doing business and costs associated with payment processing. There is no need to hide fees and/or not to mention certain fees to merchants to secure business. All merchants want to know is what they are paying, so they can budget and price their products and services appropriately to generate a profit margin. A business owner cannot do this if they don’t know the true cost of their expenses. Am I wrong…?
All you want is good service with competitive rates, right?
It’s actually fairly easy to spot misleading advertisements when you know how. Let me share a secret with you that most small business owners do not know.
All the card processing companies have buy rates from Visa & MasterCard. Visa & MasterCard are publicly traded companies and have to post those buy rates. The buy rates are called “interchange.”
For example: all a merchant needs to do is search “MasterCard interchange rates in Canada” in Google and they should be able to track down the current buy rates for that card.
Therefore if a company is advertising well below the buy rates, then doesn’t it make sense that they are making up for it somewhere? These companies are not in the business to lose money. A payment processing company is not going to take a loss to secure your business, just like you wouldn’t sell your products and/or services at a loss.
Which brings us to…
