The payment processing industry is flooded with merchant account proposals through email, telephone solicitation, and internet advertisements.
Recently, a client of mine sent me an email requesting that I explain an advertisement for a Sams Club Merchant Account because it appeared to be a good deal.
The emails email solicitation that my client received is a very typical advertisement that most merchant account providers run.
If you've received a merchant account proposal like this one, I would love to hear your experience with the company if you are still processing with them so feel free to leave us a comment below.
At very least, I'm sure you've seen similar ads, so let's take a look at this one.
Merchant Account Proposal - Teaser Rates
The internet is flooded with the advertisements for merchant accounts that claim to give companies the ability to process credit cards at rates below 1.50%. If you simply type into your favorite search engine the term "merchant account proposal" you will find at least a couple advertisements that boast rates of 1.00% or maybe even 0.39%.
The fine print behind this merchant account proposal is that these rates are reserved for Retail merchant accounts only. If you're an internet business or you process credit cards over the phone, you will not be able to receive rates as low as these advertised rates.
Merchant providers know that these low rates will entice some people into signing up for service, and the rest of the rates and fees are not always properly explained to them.
Here is the print from the email advertisement:
What I want to point out is the little star behind the 2nd bullet point that gives the rate to you. Here's what the star reads at the bottom of the email, a.k.a. "the fine print"
*Rate applies to retail card-present transactions with an average ticket under $250. Some types of businesses are subject to different rates. Certain restrictions and exclusions apply. Merchant account is subject to credit approval. Offer subject to change without notice. Requires merchant acceptance of applicable terms and conditions. For program details, speak to a representative.
Hopefully you can see that the language they use within this fine print is a way of covering themselves so that they can charge additional fees for the rest of the card types without losing any money.
Merchant Account Proposal - Mid and Non Qualified Rates
Mid and Non Qualified rates within a merchant account proposal are often cleverly hidden with most providers. I have a report that outlines the smoke and mirrors games that are usually played with most merchant account providers when it comes to the rate structure of a merchant account.
As the account holder, you need to pay attention to the overall effective rate that you are paying and not just one low teaser rate for the qualified or Card-Present transactions. If you worry about the next lowest rate program that it advertised you'll usually end up paying for it somewhere else because a customer service rep at the other end of the SAMS Club "customer support" department is not going to give you the full story on how to efficiently use your merchant account.
If you have questions on a merchant account proposal that you have received, please email me and I would be glad to analyze the proposal to let you know if it is truly a good deal or if there is likely to be hidden fees.