It’s dangerous to switch providers.
That’s right, it’s dangerous to switch merchant account providers because you only have a 1 in 3 chance of lining up with a provider that will actually take care of you.
Remember in Little Red Riding Hood when the wolf dressed up like grandma? Yea, it causes nothing but trouble. It’s a fatal disguise that is unfortunately mirrored in the merchant services industry.
If you don’t already know, there’s three types of merchant account providers but only one of them has your best interest in mind.
The Grass Is Not Always Greener
First off, forget about micro savings. It’s not worth your time.
If you’re only looking to save a little bit of money by switching providers and that’s the ONLY reason you’re looking to switch, don’t fix what’s not broken. Switch for other reasons that are more worth your time.
Avoid the cycle of switching providers that you are voluntarily putting yourself into and focus on growing your business instead.
The reason I say this, is that I talk with business owners all the time who thought they were getting one thing and it turned out to be something very different.
Unfortunately it’s sort of common practice and this sort of thing happens all the time.
The 3 Way Fork In The Road
There’s 3 possible [negative] outcomes that could come from switching providers.
Obviously if you find a provider that gives you want you want and stands behind their offer, none of the following will apply. For more information on how to make that happen, contact us for a merchant account optimization consultation.
If you don’t get want you want here’s what COULD and often does happen.
Short Lived Savings
You get want you’re promised up front and then is changes over time. It might have been an introductory rate, or a certain cost structure that changed once interchange rates adjust. The result? You find yourself in a situation that is not as favorable as you once thought.
Extra charges, fees, and costs are applied and it may be difficult to get away from paying them. Fine print contract terms can come back to bite you if you don’t know what to look for.
The big promise, such as a specific rate or contract term, turns out to be different than you thought it would be from the very beginning. I mean right out of the gates you thought you were gonna have an effective rate of 2.50% and it turned out to be 3.50% instead.
There are no merchant account police so who do you hold accountable for this? The only option is to take responsibility yourself because the company that locked you into the agreement is not going to have sympathy for you.
It could be an expensive bullet to swallow.
White Lie Proposals – i.e. the “catch”
This one is VERY common. It’s what makes promises like the “one percent across the board” rate or the “$500 lowest rate guarantee” a little white lie. It’s sort of like playing pin the tail on the donkey. I know it’s a fun game when you’re a kid, but when your all grown up who plays games like that?
How are you supposed to know to avoid something if you don’t ever see it coming?
A common scenario where this takes place is when a provider focuses HEAVILY on ONE rate as part of your total package and leaves the other things, like contract term, out. If you don’t ask about it, they don’t tell and therefore they didn’t technically lie, they just didn’t tell you about something.
Either way, it’s not a good scenario.
How To Cover Yourself
First, set your expectations up front and make sure that you leave yourself a back door.
Now, I absolutely HATE to tell you to only step one foot in the door, but the fact of the matter is that there are companies and sales reps that simply don’t present their offers in the most ethical and straightforward manner, as we’ve discussed.
This is just a little insurance plan for you to use which will give you the upper hand and make you a smart and savvy buyer.
Here’s your best plan of attack:
1- Sign a month to month contract so you can leave if they don’t deliver on what they’ve said.
2- Monitor your effective rate (your overall merchant account cost vs. one specific rate that really doesn’t matter that much)
3- Make sure you know who to call when something goes wrong (direct customer support line)
4- Ask all your questions up front so you know what you’re getting into.
If you’ve ever got caught up in any of the problems we’ve just outlined then you know there is truth behind these scenarios.
Be Prepared and Play The Game Better Than Them
Yea it’s kind of a game, but if you’re better at playing it then you’ll already know how to win.
It’s all about negotiation and aligning expectations with actions. If you’re looking for a new provider right now and you want the question by question playbook of what to ask when signing up for a new account then contact us for a FREE analysis.
No hassles, no pressure and no games. We’ll just give you the questions to ask and the plan to set yourself up with a merchant account that serves you, so you can focus on growing your business instead of babysitting your merchant account provider!