… or it is just smoke and mirrors!?
You tell me after reading this article!
I’m talking about the black magic that goes into “merchant services”, also known as credit card processing.
As a web developer, I am a magnet for “merchant account guys”. They target me as a potential referral source. As a result, I’ve talked to a lot of them over the years.
I’ve met a few good ones, but most of them are just pawns in someone else’s game.
The game these companies play is this:
- lure you (the merchant) into their program with the promise of a low fee
- add as many other fees and charges as they can
- keep you on as long as possible
- replace you when you finally quit the contract
Every one of these steps can have an aspect of manipulation or trickery involved.
disclaimer: not all merchant account companies are like this. in my experience, however, most are.
Step 1 Voodoo (the promised rate)
Sometimes the low fee that is promised is actually added onto the fee that VISA or MasterCard charges. So the rate you pay can actually be much higher than what you were presented with.
The promised fee can also be for only one type of card. Most processors have “tiered” or “bundled” pricing. They will talk about the rate at one tier, but the other tiers can be much higher. Many (or even most) of your transactions could be in those higher tiers.
Sometimes they’ll even jack the rates up even after you’ve signed the contract! Don’t worry. I’m sure the (long, virtually unreadable) agreement allows for that. It’s all legal and above board.
Step 2 Voodoo (the hidden fees)
Once they have you excited about your new low rate, they often add statement fees, overpriced equipment leases and whatever else they can think of to add to their profits. Of course, it’s all spelled out in the contract; buried in the fine print where you’ll never find it.
They also like to make their statements so complicated you will never find the fees there either. If you do find their fees, they will often disguise them as something else. For example, a “regulatory fee” might not be due to any regulation. It’s pure profit for them!
Step 3 Voodoo (the clause with claws!)
A lot of contracts are hard to get out of. Divorce court comes to mind!
These contracts aren’t as bad as that, but they do keep you on the hook for a long time (typically three years) and charge you a fee if you want to quit early.
Step 4 Voodoo (crack that whip!)
The processor knows that eventually you’ll be leaving. They pretty much have a “revolving door business”.
Good thing they have a huge staff of salespeople. When you leave, they’ll just find a new client to take your place.
Industry wide, the attrition rate for merchant accounts is about 30%. That basically means that on average, everyone stays on for the three year term of their contract and then bails.
Pass the Barf Bag
So after watching client after client go through this process with vendor after vendor, I got pretty disgusted.
It honestly seemed like there was just an endless supply of merchant account guys all lined up to do exactly the same thing to my poor customers.
Enter The Hero
Eventually I found a company that wants to treat people right and build relationships that last forever. In fact, our business ideals are so well aligned, we decided to partner up. They are now part of The Numbers Coach family.
We don’t want to have a revolving door business. We want to build a portfolio of clients that stay with us forever. Every aspect of the business model is built to support this.
The basic premise is that if we are good to our customers, they won’t leave and we won’t have to replace them.
It seems to be working. Our attrition rate is only about 3%. That’s ten times better than the rest of the industry.
Here is what we offer:
We are merchant account brokers. We don’t work with only one provider. This means we have a lot of options for you in terms of how your credit card processing works.
Need equipment (card readers and things)? We have providers that will pay for your equipment (so you don’t have to).
Need to get paid ASAP? We have providers that can get funds to you the next day.
Are you in a “high risk” category (such as selling virtual products)? We have providers that specialize in this area.
Need other services like ATM’s? e-commerce? repeat billing? Quickbooks integration? You got it.
Lots more, too. Just ask.
Transparency and Fairness
We charge differently than a lot of processors. We don’t use tiered or bundled pricing. The differences get too complicated to explain here, but I’ll summarize: our way is a better deal for you.
At the end of the day, we’re willing to make a little less money than some of our competitors. We want you to have more money in your pocket, and we want you to stay with us forever. We never want to have to replace you. It is in our best interest to keep you happy, and everything we do is about just that.
Once you sign on with us, we guarantee that our price to you will never go up. VISA and MasterCard may change their rates, but we will not. (If that sounds confusing or like “weasel words”, we can explain. This is a truly legit guarantee.)
Rock Solid Customer Service and Support
We know you want quality. That’s why we have our own in-house customer support team.
Are we control freaks? Yes we are. We want to control every aspect of your experience so you always get the support you need.
Again, the whole idea is to keep you happy so you stay with us forever.
No Equipment Leases
Equipment leases are just not a good value for you, the merchant.
Some companies like to charge $39 per month (or more) for a card reader. This doesn’t sound too bad till you multiply it by 36 months. That’s almost $1500 for a card reader that is about $300 retail.
We wouldn’t do that to you.
No Voodoo For You
As I said in my disclaimer earlier, not all merchant account companies are bad. If you’re with a good one, by all means stick with them.
However, if you’ve been on an endless merry-go-round where all the horses look the same, by all means, it’s time to get off.
In most cases, our credit card processing will save you so much money, it only makes sense to switch right away. Oh, and remember that fee if you quit your current provider early? We can help you with that.
Here is what I would suggest. Use the contact form on this site. Let me know you’re interested in a proposal.
The next step will be to get a copy of a recent credit card statement. This will give us an accurate picture of your business environment in terms of credit card sales. Based on that information, we will put together the best possible solution for you.
If you like what you see, we can help you start saving money right away.
If not, that’s fine, too. I hope you still found this article entertaining and informative.
Do you have clients that might be interested in saving money on credit card processing? Drop me a line – you’ll be glad you did!