Education

There are many ways merchant account providors can dip into a business owners profits with out even them knowing about it or falsely understanding how their merchant account has been setup. We have set this up in effort to educate business owners and help them understand how important having a honest and upfront merchant provider can save a business owner thousands of dollars with little effort. We will list a few of the common methods that we see merchant companys use on their clients to dip into their pocket.

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Rock bottom rates

This is the most common that we see in the market place today. Business owners are looking for the lowest rate to get charged so they get to keep the most money for every transaction. Example: If a business calls up and ask us a single question, "What are your rates? We are shopping for the lowest rates." This is the easiest catch out there. This is where a merchant provider will just make up a rate to give to the business. Example: " We can sign you up today at 1.12 %. " They might even try to make it more beleavable with a rate like 1.20%. Far under cutting any rate even possible. Business owners don't have the time do do the homework to see how pricing is set my the major credit card companys. This client will more than likely be signed up on a two tier or three tier system with the top rate being the below cost rate of 1.12% from the example above. When this happens the account will be setup and every time a transaction is accepted. It will look at the top rate. The system then compairs the top rate to cost which you can find on any major credit cards website. For example lets say cost is 1.65% for swipped transactions. When the top rate is below cost it downgrades the transaction to a rate that is above cost. The next rate down may be anything from 2.99% to 3.89%. In this method the only rate that may showup on your statement it the top rate but every transaction will be a downgrade thus more money for the merchant provider and more money for the credit card companys. Most companys allow 85% or more transactions to be downgraded. This hurts the business owner and puts more money in the banks hands than the business owner. Downgrades do happen this is not a bad thing. Merchantguy.com strives so 80% of all of your transactions do not get downgraded. This is very rare in the industry. Merchantguy.com will discuss this with you in detail and help you avoid the common problem and help put more money in your pocket rather than the bank.

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Merchantguy.com Philosophy

We are personally involved with our clients to make sure they get the lowest rates and best service. We provide our clients the support they need both during and after setup with no contracts. We believe when we take great care of you we don't need a contact to keep your business. We keep things simple. That's what makes us different. Better.

The Contract - hidden fees and loop holes you never see coming

Many merchant providers out there still require business owners to sign a contract. Why? This is the best place to load you up with paperwork and hold you to a number of expensive problems that can bite you in the end or the begining. Depends on the contract. Common problems in contracts and how they hurt the business owner.

Monthly Minimum: If you are a new or small business owner this is where you will get hit. Since you are a new or small business owner the merchant provider will not be able to make very much money on your account so the will need to set a minimum on your account. We have seen minimums ranging from $10 - $200. What many think is that you must swipe the minimum every month. This is not true. What it means is that every month the minimum will be removed from your bank account. With or without business. Example: Joe has a small shop and sells wigets. Let say joe sells $300 worth of widgets in one month and has a $50 minimum on his account. Joe thinks that he has no problems since he has done over $50 in business he will be fine. This is wrong. At the end of the month Joe thinks he will have $300 - fees in his bank account. What Joe will really have is $300 - $50 - fees = (not much profit). This is one thing to watch for is a minimum.

2-6 Year Contract / Cancelation Fees: This is another great way a merchant provider will loop in a business. This means you have to use this company for 2-6 years for all of your credit card services. At any time if Joe is not happy with his rates and decides to change providers. He will have to pay a fine in his contract for breaking his contract. We have seen theses range from $150 - $3000. As soon has Joe changes providers his bank account will be hit with the fine automaticly and he will wonder where his money went. Anyone who starts a business needs a good partnership not a forced legal tie. Merchantguy.com does not have contracts. We don't think its fair. We only use contracts in special cases.

Sub-Contract Merchant Companys: This is not as common but still a problem. This is when a merchant company is not a registered Independent Sales Organization or tell the business owner they are above the need to be regestered. Common things said, "We are bigger than a bank" or "We are a registerd mint" both of which are false. If they were a bank or bigger than a bank you could open a checking account with them. If they were a mint they could print money and they would have no reason to take money from you. Companys like these do try to come in and save a business owner money over their current provider to get them on as a client but they have no reason to take care of your account or reason not to raise your rates three months after they sign you up. One way to spot this type of business is ask them who they are registerd with and check. Another way to spot this to see them using merchant applications from a local bank that you can walk into. They are taking the rate they get from the bank and raising the rates on you. You would of been better off walking down to the bank and getting a account setup.

Sale vs. Lease Terminals:

This has been around since the begining. There are many pros and cons to each not all bad. So in most cases you should always buy your terminal or signup for a free terminal program. Back in the day credit card machines where very expensive. Now you can pick one up for $300 with many features and will do about anything you would like them to. The problem with a lease is the $25- $60 a month you pay for a lease of 2 to 4 years and you can do the math a $25 a month for 2 years is a $600 terminal when you could get one for half that price. On the other hand as technology has changed we now have wireless card readers avaiable and work great for mobile plumers, locksmith, independent cab drivers and so on. The new wireless scanners are still in the $1000 to $1500 price range so a lease for a new business owner is a better bet than trying to come up with the money up front. Merchantguy.com trys to sell most equeptment. We understand that getting a business off the ground is expensive and we offer a number of different ways to get a terminal. Feel free to contact us with any questions you might have.