Minimizing the Hassle of Merchant Account Credit Card Processing

My, how times change! Only 15 years ago, if you paid for a purchase with cash, you were treated with respect. At worst, if you paid for a large purchase with stacks of cash, they thought you were a drug dealer. But they still treated you with respect. These days, if you don't accept credit cards, they think you're a terrorist trying to leave no tracks. You can't run any kind of business these days without accepting credit cards. You would probably have to send away nine out of ten customers. One reason small merchants stay away from credit cards is this - these merchant account credit card processing companies can be such a hassle to deal with.

Dealing with these companies, it's hard to not come away with the feeling that they have it all over you. And you can't do anything about it either because they have such insanely complex agreements and contracts that you just have to sign. You know you have to comparison shop, but it's not as simple as looking at a couple of numbers.

That's the way these merchant account credit card processing businesses have planned. They make their agreements and the structures so opaque that people just give up even trying to understand. Just signed with whoever has the most insistent salesperson.

Whatever you do or don't understand about the contract, do try to look out for a few basic things. Understand how to watch out for these problems and you will have secured yourself against most of their tricks.

Before you enter into any merchant account credit card processing contract, look for a way out. If they try to block your way out by charging you $5000 in termination fees, which isn't all that uncommon actually, look elsewhere. Typically, you shouldn't have to pay more than $250 in cancellation fees.

Credit card processing equipment is widely mass-produced and there's no reason that they should charge you a lot for it. But they do tend to treat equipment costs as a major source of profit.

Very often, the company will ask you to buy propriety software that's only available from them. And it can be quite expensive. If everything seems to work out well with the company and this is the only sticking point, you could perhaps see if they offer outright purchase.

If a merchant account credit card processing company only allows the lease of equipment, it shows that they are trying to milk you. Don't go that way.

Most credit card companies will charge you anything under 3.5% for a transaction. They call it their discount rate - even if it isn't anything as pleasant as a discount. It's money they take from your profits. They tend to offer their customers different rates depending on how long-standing a business you own, the kind of business you're in and your credit score. No matter how new you are, you may probably never have to pay them more than 2.5% discount rate. This may not sound like much, but it can quickly eat into your profits.