Whether you offer a product or service, credit card processing is a must. A merchant account will allow your business to meet the needs of your customers. When choosing a service provider, carefully review any fees associated with the service. The following is a valuable list of five “hidden” fees to avoid.
If you are starting a business or looking to expand your payment options, you may be searching for merchant account service provider. Establishing a merchant account is different than a bank account in that it allows your business to add credit card processing as a method of payment. Some banks may offer this type of account to you, but specialized merchant account service providers are able to provide expanded services like credit card processing equipment, consulting, and 24-hour support. The disadvantage to operating through any merchant account, whether it be through your bank or another provider, are the fees associated with such a service. Some minimal fees are unavoidable (like those charged by Visa and Mastercard for example), but unfortunately there are many providers who may try and milk more money out of you than necessary. When choosing a service provider, carefully review any fees associated with the service. For starters, you should never have to pay an application fee or a set-up fee. Jeff Adcock, of Veritrans LLC, offers this valuable list of five other “hidden” fees to avoid.
1. Cancellation Fees. Too often, customers don’t receive the savings they were promised or experience a decline in customer service once they’re locked into a contract. But high cancellation fees—ranging from hundreds to thousands of dollars—prevent them from switching providers. Don’t let these fees prevent you from receiving the quality service you deserve. Ask about cancellation fees before you sign anything. 2. Monthly Minimum Fees. Many merchant companies charge a monthly minimum processing fee. You can avoid this fee, in many cases, by meeting or exceeding the collected transaction and discount rate fees. For example, if your monthly minimum fee is $25, the collected transaction and discount rate fees must equal or exceed $25 per month. By processing more than this amount, you should be able to avoid this fee altogether. If your processing volume will be low, it may be better to pay a slightly higher statement fee and have no monthly minimum fee. 3. Double Transaction Fees. These include things like “sales item fees” and “POS watts fees.” Sometimes these fees are broken into different terms and found in different locations of the contract and statement. Always review your bill carefully and understand what you’re being charged for on each bill. 4. Multiple Monthly Fees. While many merchant account services require a statement fee, some providers include additional charges such as Customer Service Fees, Debit Access Fees, Help Desk Fees, and PCI Compliance fees. These fees are often unnecessary and always costly. 5. High Monthly Volume Surcharge. Some providers charge an additional percentage on top of your normal discount rates, based on volume processed above your estimated monthly volume. Learn the details before you sign any contract.
Whether you offer a product or service, credit card processing is a must. A merchant account will allow your business to meet the needs of your customers. In turn, you should expect your merchant account services provider to meet your needs, not bog you down with “hidden” fees. The secret to choosing the right merchant account service provider? No secrets!
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Helen Walker. Veritrans offers affordable and reliable credit card processing equipment and merchant account services.
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