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Do Not Open A Merchant Account Until You Read This!

omupasomupas subscriber Posts: 7
DO NOT OPEN A MERCHANT ACCOUNT UNTIL YOU READ THIS! If you are a business owner seeking to accept credit cards as a form of payment from your clients or if you already accept credit cards today, you must read this! Many business owners find out too late that the fees that they were presented with for their merchant account are NOT what they end up being charged. Often they do not find this out until they receive their first statement! DO NOT fall into this trap. You want to deal with a company who leads with their best foot forward the first time. When searching for a merchant account provider make sure not only are they disclosing their best deal, but they are indeed disclosing the material facts!! When you shop for your merchant account, see what information they give you without you having to ask about something. Typically all they quote you is a rate, transaction fee and monthly fee. What about the other fees? At that point, you should feel betrayed, as they did not keep your best interest at heart. DO NOT sign up with another company if they do not disclose the fees below! You will be surprised how many DO NOT disclose these fees up front and how much they charge without you asking. Make sure you find out the following fees: Application/Set Up Fees Qualified Rate Midqualified Rate Nonqualified Rate Transaction Fee Batch Header Monthly Minimum AVS Interchange Pass Through Credit/Debit WATS/Auth Fee Annual Fee Monthly Basic Service/Statement Fee Contract TermIf someone tries to set up your account without mentioning these fees, check your paperwork closely, you`ll be surprised how much you weren`t told! I wish you all the best with your ventures! Hope this information helps some of you, and business owners who can relate, please share your experiences so that new business owners can avoid the pitfalls that some of you may have experienced.
If there is anything I can do to help any of you with your merchant account needs, please don`t hesitate to contact me.


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    iouone2iouone2 subscriber Posts: 14
    Great point. That`s actually one reason I went with an established (long time in the industry, brand recognized) company when I started taking credit cards. Originally I thought. Damn. Maybe I should have went with someone less expensive. But in the end, I have heard so many horror stories of hidden charges that I am thankful I didn`t. All in all, I have a pretty good rate and all the fee`s were acknowledged upfront.
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    NuevolutionNuevolution subscriber Posts: 30 Bronze Level Member
    That`s why you should be aware of what you are getting into in the begining. For the past 4 years I`ve been using Linpoint with Card Service International or AKA 1ST DATA. What I liked about their service is: No hidden costs, No exagerated fee`s. and most of all they were upfront of my monthly cost and how much I would have to pay if I didn`t make a minimum sale of $25.00 Dollars per month. My Payment gateway fee`s where outlined from the begining, my rate was outlined in the contract. I liked their service so much that I partnered up with Credit Card International and I am offering it to my customers with no up front cost... All it takes is 4 minutes to fill in the approval form and you will get a pdf file explaining to you what is expected from you and what to expect from them. The payment gateway fee is 19.99 per month (which I haven`t seen a charge)it`s 1.46-2.2% depending on your qualifying rate and we are even offering a 100 dollar gift certificate to any restaurant of your choice if we can`t beat your current rate.
    OMUPAS,Did you research the company before doing business with them? Do you understand what a qualifying rate and a non-qualifying rate is? Expect to be charged the 2.2 or (what ever your rate is) plus a 0.15 cents per transaction. Where did your Current Processor go wrong with you?
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    omupasomupas subscriber Posts: 7
    Thanks for the posts and the contribution to this thread so far.  Nuevolution, I am in the business of providing merchant services to businesses.  The reason I posted this thread is to help shed light on the industry itself.  There are a lot of companies out there who don`t disclose all of the pertinent fees to their clients and lead with teasers to get customers to sign up for their service.
    Given your example of an online gateway type of a program, this is how I set up an online based merchant account.  Of course, this is a base program and I always work individually with businesses who are already accepting to help save their bottom line.  Anyway, this is the type of pricing I am able to achieve for my clients:
    Authorize.net Payment Gateway with Virtual Terminal:Application/Set Up/Activation Fees:  WaivedInternet/Keyed Base Rate:  2.19%Non Qualified Rate:  3.19% + $0.10Transaction Fee:  $0.25/transaction (Includes online transaction fee)Batch Header:  $0.00AVS (Address Verification) Fee:  $0.00Monthly Basic Service Fee:  $8/monthMonthly Online Gateway Fee:  $5/monthMonthly Minimum:  $0.00Annual Fee:  $0.00
    I also work with business owners on a referral basis.  I set their referrals up with a program such as above with no hassle pricing, and I pay the referrer either a 1 time up front bonus for each referral that does business with my company or I pay a lifetime monthly residual on the montly profits of the account depending on what that particular referral source chooses is best for them.
    Just to give you a short background about myself.  I worked for 3 years in a corporate merchant accounts office.  I found that in this industry most companies try to squeeze as much out of each account as they can to reap as much profit as they can.  The approach I take is to work on slim margins and make my profit on number of accounts.  With the slim margins it`s a win win for me and my clients.
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