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Advice For The Merchant About Credit Card Processing

posted May 21, 2013, 8:15 AM by Rickey Wright   [ updated Aug 22, 2014, 8:02 AM ]
There are some mistakes merchants can avoid when they get a merchant account and start accepting credit cards and debit cards as payment for their products and services. Here is some good advice from a fellow merchant who now is an independent credit card processing representative. 

1. Do not fall for the "What's your rate" sales tactic. It is not the rate it is the type of merchant services pricing plan that you need to look for. The most transparent pricing plan is the Interchange Plus or sometimes referred to as the Interchange Pass Through merchant account. Another good choice especially for the merchant who occasionally accepts a credit card is the Flat Rate plan. Traditional Tiered Plans are to complicated, subjective, easy to overlook downgraded surcharges for reward cards and corporate cards and ultimately cost the merchant more money. Now they are called by other names like "Enhanced Bill Back" but stay away from these Tiered merchant accounts.

2. You should never have to sign a merchant account that has an early cancellation penalty. There are merchant accounts being signed everyday with an addendum to the terms and conditions of the merchant contract that states that there are no early cancellation penalties. Some credit card processors put that right on the merchant application for you to sign. Here is an example of one my processors that have added this to their merchant application "The terms of this agreement are month to month and there are no early termination (cancellation) fees." My advice is this, You should do business with a company because they are doing a good job not because it is to expensive to leave and take your business somewhere else.

3. It is not in the best interest of the merchant to lease a credit card terminal. These leases come with an irrevocable lease contract which is impossible to get out of without paying one of those early termination (cancellation) penalty fees. This is a very costly mistake for a merchant to make. Credit card terminals, like all electronics, are getting less expensive and a large majority of merchants who do not have long lines of customers checking out can use their computer as a virtual terminal and they don't need a credit card terminal.

4. If some salesman is using high pressure on you to sign today or the deal goes away "JUST SAY NO". This salesman is not looking out for your best interest they are looking out for their best interest. Remember the Interchange Plus pricing plans, the No Early Termination (cancellation) Penalty Merchant Contracts and Not Leasing Credit Card Terminals are always in the merchants best interest.

Rickey E. Wright
Cabrera Wright Company
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