You know the story of how lemmings behave right?
They all run up to the edge of the cliff and when one jumps off, they ALL jump.
One follows the other like it’s the ONLY option they have.
Now, I guess in the case of a lemming, they might hit the water at the bottom of the cliff and be okay but it’s not much of a life to just do what the other one does.
The same “do what everyone else does” mentality exists when shopping for and maintaining a merchant account.
Let’s look at why subscribing to this theory hurts you in the long run, how to avoid it and what to do instead.
Mindlessly following suit
It’s common place to shop for a merchant account provider simply by seeking the lowest rate.
Tons of business owners do it because it’s what Google search results return when they search for “low merchant account rate.”
You may have done it this way before and it may be what your searching to do at this very moment.
Or perhaps your friend told you about a low rate offer he found online and now your searching for the same deal he got…
Most merchant account providers all advertise one specific and low introductory rate offer that almost seems too good to be true.
Then, promises are made and rarely kept and as a result, most business owners end up in a cycle of changing providers every 6 months to a year.
It’s a vicious cycle and once you get used to it you’ve just trained yourself to do it all the time.
It becomes a regular thing that you do every year just like doing your taxes and before you know it you’re mindlessly following everyone else just like a lemming!
Here’s your chance to stop
Did you know there are business owners who DON’T switch providers every year? They stay with a provider 2, 3, 5 or even 10 years because of the level of customer service and other fringe benefits that they receive from their provider.
Sound too good to be true?
Imagine taking the task of shopping for a merchant account provider off your plate. The time, the effort and everything else that goes into it is removed from your yearly (or bi-yearly) task list.
All of a sudden, you’re free to do other things, like grow your business instead of just maintaining it or babysitting it.
Wouldn’t that be nice?
If that sounds like something you’re interested in, at the bottom of this article there’s a couple suggestions on what to do next.
How it hurts you
As much as I hate to admit it, the merchant account industry has a horrible name for merchant account providers not following through with promises made at the time a contract is signed.
Rates change and contract terms adjust and before long there’s extra fees piling up and you’re being charged for something you don’t want.
When you shop for a provider on rate alone, you’re setting yourself up to be treated like a number.
It’s like asking a friend to borrow $20 and then trying to give them advice on which stocks to pick and how to manage their money.
Your creditability as a money manager was shot when you asked to borrow $20!
When you present yourself as someone willing to accept a number (a percentage rate) as the SOLE reason for doing business you’re saying that it’s the ONLY thing that matters when it comes to that service.
Since we both know that rate is not really not the whole story, need I remind you:
- What happens when you have a chargeback?
- What happens when your terminal breaks?
- What happens when you need to update your bank account by the end of the day and it’s already 4:43pm!
Who do you call?
If you don’t know in advance the answer to those three questions (scenarios) then you’re likely to get pinched when push comes to shove.
Do it the right way – 3 quick tips
Here’s three quick tips that go along with the 7 questions you should ask your merchant account provider when signing up for AND maintaining a merchant account.
- Rate is NOT the only thing that’s important
- Make your list of priorities and stick to them when negotiating a merchant account. (hint: rate should be like number 3 or 4 on the list)
- Check your statements each month and monitor your effective rate.
Forget the “lemming mentality”
Now that you have a good idea of why you shouldn’t ONLY pay attention to the rate, you’re ready to make an informed decision on merchant account provider selection.
If you’re adding services to an existing merchant account, please feel free to contact us so you can speak with a member of our team to guide you through a step by step merchant account analysis.