Merchant providers and web site sale conversions

With the right merchant account your web site sale conversion will soar, but you have to be careful careful in choosing among the providers available on the internet.

Here's an insightful article, courtesy of Cardservice International, about this subject:

Internet Merchant Account Sales Practices That Harm Merchants

"There is no such thing as a free lunch". Remember hearing this phrase when you were growing up? While the internet has certainly changed the way we live and conduct our business, there are some rules of business that have not changed. One rule is to be cautious when the offer looks "to good to be true." Another rule is that you should not engage with companies that use deceptive practices to win your business. Here are some of the practices you need to watch out for:

Start Your Own Internet Merchant Account today for FREE!

As you surf the web and gather information from e-commerce providers, you will likely see gateway or merchant account processors luring you with everything is free type offers. If you call these providers and start asking questions about what fees will appear on your monthly statements, you will quickly see that everything is not free. While starting a internet merchant account can be fairly quick & easy for you, the reliable e-commerce providers are expending significant resources to get you up and running.

They must recover the costs for software engineering and hardware depreciation just like any other business. If they say start-up is free, they have to recover the costs elsewhere in higher discount rates and/or transaction fees. As an astute business owner you should know the old saying: There is no such thing as a free lunch. The same applies here.

Suspiciously Low Discount Rates & Fees

Be careful about entering into an Internet Merchant Agreement with a company based on rates and fees alone. Some service providers offer a really low discount rate to start and begin bumping it up a few months after you have enrolled in the program. Others make it up in surprise fees ouch! Sometimes calling tech support is like playing Russian Roulette on first shift you get fully capable support, and second shift it's total incompetence.

If the provider's rates and fees are significantly lower than the others, you should ask for references. Make sure to read the back of the merchant agreement before you sign and see if they have expensive exit penalties. If the provider's rates are really that low, why do they need an exit penalty to retain customers?

Every 0.1% difference in discount rate translates to only $1 per month for every $1,000 of online orders processed. How much is reliable tech support worth to the success of your business? Ask for the customer service number and call it a few times to see how long you get put on hold. Ask if that really low discount rate is guaranteed in writing and if so, for how long.

One of the benefits of full service processors (like Cardservice International) is that their competitive rates and fees are established by the Corporate Office and are less likely to be "tinkered with". Many Internet Account Processing Companies will offer a "great deal" on discount rates and fees only to make it up later by raising your rates and fees a few months down the line. History proves these to be "bait and switch" tactics. Don't take the bait.

Using Smoke & Mirrors on the Merchant Account Application

Have you noticed that some merchants are easier to get approved for Internet Accounts than others? Merchants who sell risk-sensitive products such as multilevel marketing, pyramid schemes, sexually oriented materials, military firearms, and pyrotechnic devices are not accepted by reputable banks or processors.

If you are in this type of business you may have some trouble getting approval with a trustworthy merchant account provider. Yet, you know there are companies online selling sexually oriented products while accepting Visa, Mastercard and American Express. How are they able to do this?

There are Internet account processors who accommodate these types of businesses. In many cases the sales rep will use different wording on the application to hide what the company really does. While this may help the merchant get started in the short term, this could have devastating effects in the long term. As soon as there is a problem with a chargeback or cancelled order, the processing bank will find out and your merchant account will be closed.

Your funds will be frozen until the bank believes it is safe to release them. Also, you may end up on the Visa Certified Terminated Merchants File (CTMF) which means you may never be approved for another merchant account.

If your funds are frozen, you could lose your business. While smoke and mirrors work well for magicians, your sales rep should not be using this type of magic on your merchant account application. If he is, find a new sales rep. This risk is too high.

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