The 10 most important questions to ask when choosing a merchant account provider

The most commonly asked question merchants will ask their sales rep when looking for a Merchant Account Provider is "What are your rates?"

This question assumes that the quality of service, integrity, track-recordand risks of these providers are all on an even playing field with the only difference being the rates This is not a valid assumption.

While signing up for competitive discount rates is important, there are other important questions that need to be asked. As a sharp business owner, you already know that you typically pay more for better quality and service.

You will find the same holds true when choosing your Merchant Account Provider. The following is a list of questions many merchants wished they had known before they got their first Merchant Account. These are questions typically asked by a merchant when they are seeking their second or third account and have learned the hard way.

Any one of these issues could cost the merchant a great deal of money and stress much more than could ever be justified by a difference in 0.1% on a discount rate There is much more to a good Merchant Account than a low discount rate.

Service Related Questions

1. Before you "Go-Live" -- Who will be your approval advocate and help you set-up your Web site for processing Make sure your sales rep will support you during the approval process and quickly advance you to the "Go-Live" stage Beware of gateway and Merchant Account Providers with fast talking sales reps who have not accurately portrayed your business (in order for a quick underwriting approval) and are just looking to sign you up fast only to get your account funds put on hold later. Before you sign the dotted line, find out; who will help you after they send you the internet URLs and set-up files, what problems you could encounter, and how the provider will fix them If you get weak or slow answers on this, it is not a good sign.

2. After you "Go-Live" -- Who do you call for customer service and what are their business hours? See if they are available on evenings and weekends Call their service line a few times to see if you get a response and how long you have to wait Nothing is more frustrating or costly to a merchant than not being able to process because of a transaction problem Remember, every "speed-bump" or problem can cost you far more than a few tenths of a point in the discount rate As you see elsewhere the lowest price provider is not usually the lowest cost provider.

Risk Related Questions

3. Do they charge a hidden exit penalty fee if you don't like the processing service and decide to cancel the Merchant Account Some merchant account processors or banks will attract clients with low discount rates then raise them in just a few months To minimize cancellations, they may assign hundreds of dollars in penalties and hold all or part of the merchant's funds for months if the merchant tries to leave

4. Do they have a processing limit If they do, what is it and what is the penalty if you go over the limit?

5. Can they put their ultra-low discount rates in writing?

6. How many years has the provider been processing internet merchant accounts What is their track record 1 year? 3 years 10 years? the lowest price provider is not usually the lowest cost provider

7. What is the discount rate and transaction rate history of the provider in the last 3 years? This is a good way to really test the mettle of the candidate provider Don't let them slide on this question If the sales rep needs to do some research, let him do it

If you find out that discount rates have gone up twice a year for the last few years at 0.1-0.2% each increase, you can expect the same increases for you.The same caution goes for rising per transaction fees Frequent increases on rates & fees will put your profits at risk..

Cost Related Questions

8. What are the Set-Up fees and procedures: Can they send them in writing Make sure you know all the fees required to get you taking orders, and the amount of work you need to do to get started For example shopping cart set-up fee Gateway set-up fee Internet Merchant Processor set-up fee Combined gateway/processor fee Then find out how much time and commitment will be needed on your end to "go-live" and start taking orders Beware of signing agreements that do not have the set-up fees in writing

9. What are all the recurring fees you should expect on your monthly statement Can they send them in writing?

10. When are the monthly fees paid, and how are the funds transferred? Internet account processors will collect their fees electronically each month using an electronic debit or ACH Find out when those ACH transactions are going to hit your bank account You donāt want any surprises here because your bank can charge you $25 for each bounced ACH transaction and you can expect as much as another $25 or more hit from the processing bank That's a $50 hit to your bottom line for every bounced ACH transaction An unpleasant surprise to say the least.