So What's the Deal With 'Free' Merchant Accounts - Do They Exist?
So What's the Deal With 'Free' Merchant Accounts - Do They Exist
?
Visa, Master Card and other card companies impose charges on payments processed by a merchant. There are a number of tiers or levels in the interchange rate and each credit card will be charged according to the tier or level it qualifies for.
For example:
1. Qualified rate This is the rate charged when the card is present physically at point of sale.
2. Mid-qualified rate This is the rate charged when the card is imprinted, but not swiped. This usually occurs off-site where a terminal is not present.
3. Non-qualified rate This is the rate charged for "MOTO" transactions (mail, internet or telephone order).
Furthermore, there are a number of fees that are attached to the merchant accounts upfront or as back-end fees.
The following are the most common fees you might encounter:
1. Transaction Fees this is charged each time a transaction is completed. This is flat rate, usually ranging from $0.10 to $0.25
2. Discount Rate this is a flat-rate percentage that is taken out of each sale processed through the merchant account. Discount rates range from 0.95% - to 7% or more depending on the merchant service and its intended use.
3. Statement Fees this is a fee that is charged routinely for the generation of a monthly transaction record.
4. Monthly Minimum Fees there is always a minimum fee charged when the total fees of that month of the merchant account do not equal the minimum required business transaction level. For example, if the minimum fee is $15 and the fees incurred from using the service are only $10, then an additional $5 will be charged for that month.
5. Cancellation Fees this is a penalty charge that ranges from $150 - $275 if the vendor (you, potentially) cancels their account before the term expires, which is usually 2-3 years.
6. Batch Fees when a merchant settles their terminal a fee is charged. This fee is known as batch fee because this process is called batching.
As you can see, there are a multitude of fees that will be charged for any standard merchant account. There is absolutely no way anyone can provide you with a free merchant account, because the interchange fees have to be paid by someone, and someone else will definitely not pay for you to use their service at their own expense.
A logical explanation would have it that these fees would be extracted in different manner, most of which would be indirect and "hidden". And in that light, it's always better to opt for a service that clearly discloses its complete fee structure up-front, instead of being "lured in" under the premise of getting something for "free" - only to find yourself the victim of an endless array of hidden expenses...
Though they're few and far between, there are a few companies that provide a great service with a low-cost fee structure. You'll be far better off looking into those services, instead of chasing after the "free offers".
Bottom Line: Free merchant accounts don't exist.
It will cost you money to accept credit cards, one way or another. Always read the fine print (the terms of service), and realize that most companies that portray something as being "free" will make their money by locking you into a contract of some kind - most of which are "incentivised" with a steep cancellation fee.
So do your research, and look for reasonable, realistic processing charges that make sense for your business.
Because an overly "cheap" merchant account will almost definitely turn out to be an overly-expensive mistake.
Play 'Hidden Expedition: Everest' on m3 ds Movie Titles That Begin With A My Full Moon Adventure Success tip from Jim Rohn-Success is attracted Robert Beegel Advice on X Ray Technicians Benefits Of Using The Key Duplicates in Santa Monica Play 'Universal Crossword' on m3 real What is Reiki? Part Three Full of Shadenfreude? excillense How Much Do Undetectable Braces Price? Exfoliate Naturally An Introduction to Zend Framework