The Fallacy Of Switching Merchant Account Providers
You may have been caught up in the fallacy of switching merchant account providers before, and you didn’t even know it!
It may have been because a friend recommended the company they use, you were seeking lower rates, or maybe you just wanted a change.
Whatever the reason may have been it probably had to do with a promise made by the new merchant account provider for something that appeared better than what you had.
Sometimes switching providers doesn’t really accomplish what you originally set out for.
Often times there is knowledge that “just around the corner” that you would not have any way of knowing that affects the outcome of your new merchant agreement.
Unless you know the right questions to ask and you’re tuned in to how most merchant account processing contracts work, you are probably set up to fail from the beginning.
The way things are and the way things are perceived are two completely different things. Arming yourself with a little bit of knowledge about how merchant account contracts are set up will help you tremendously.
Switching Merchant Account Providers
I like to think that most people, when signing up for a merchant account, believe that they will receive the contract terms they have been promised by the representative that is setting up their account.
Most people would like their merchant account provider to operate from a place of integrity, honesty and truthfulness while keeping the golden rule at the forefront of their business efforts. I agree.
As a result of societal influences that I won’t go into right here, an ideology is created where everyone in business is completely honest and practices full disclosure. A picture of absolute certainties is painted where contract terms are revealed openly and merchant account providers supply answers to questions that uninformed buyers would not otherwise know to ask.
In an ideal world this is true.
In reality it’s not always that way.
How things are (sometimes)
I’m sure it won’t come as a surprise to you knowing that some merchant account providers try to take (from you) as much as they can get away with.
Some providers focus on leasing credit card terminals for extremely high monthly rates and they don’t care very much about customer service.
There are providers out there who offer introductory rates representing that the advertised rate is the whole story. It usually isn’t.
There are companies that call you with the intention of trying to scare you into thinking that you are paying WAY too much for your current service. That is not always true of course.
If you haven’t reviewed your merchant account rates in a while, a rate review may be helpful but doesn’t necessarily mean that you are getting ripped off as some providers would like you to believe.
So you may think that the solution to the way things are is to switch merchant account providers. However, this often times leaves you in the same situation that you were just in.
You’re spinning your wheels if you buy into this notion.
Getting stuck in a cycle of change
The fallacy of switching providers is that your problems are solved once you start with your new merchant account provider.
You think you’re going to get a locked rate for 3 years, your sales rep tells you to call him/her with all questions, and you’re in a month to month contract.
Maybe in the short term, you can get a lower rate (it’s never ONLY about rate) or a better terminal solution but if you don’t pay attention to your account and know what to look for each month the inevitable will happen.
Rates change. And reality sets in, again.
You will likely slide back to the place you were with your previous provider and in time you’ll be presented with another, newer savior to all your problems: your NEXT merchant account provider.
Hence the cycle of shopping for a merchant account provider every year or two.
Perhaps you should consider the reality of the merchant account industry.
Keep a winning perspective (here’s the good stuff)
Knowing that change is inevitable is one of the most crucial elements to keep in mind when operating your merchant account.
Very few, if any, merchant account providers will tell you up front that merchant account rates and fees change all the time.
Interchange rates adjust 2 times per year, and most merchant account providers attempt to increase rates over the course of time to increase provider markup.
So how do you combat this?
Simply pay attention to your statements each month. Monitor your effective rate and set yourself up with a provider that will actually answer your phone calls.
Adjustments CAN be made at any point if you align yourself with a merchant account provider that cares about retaining your business.
The best way to select a merchant account provider is to look at the social proof and consider how they present themselves to you. Consider a couple of important questions to ask when selecting a provider and trust your judgment in the end.
Set yourself up to stay out of the cycle of changing providers all of the time. You’re probably spending unnecessary time that you could be using to work on other important tasks within your organization. Consider the elements offered here and if you have any questions, please feel free to leave a comment below.
We’d love to hear about your experience and what makes working with your provider good or bad.