10 Questions to Ask When Selecting a Merchant Account
There are several questions that a person needs to ask when getting a merchant account.
1. Are there any fees or rates with a merchant account?
This is because a person needs to understand all of the fees or rates involved with a merchant account. To find the cheapest merchant account, a person needs to look for the account that has the lowest interchange rates.
2. What type of pricing model does the merchant account use?
A person needs to ask this question because there are a variety of price models that come with different fees. The most common pricing models are tiered, interchange plus, and enhanced recover reduced.
3. How to get the best interchange rate?
A person should quality for the lowest possible interchange. These charges made up the majority of a person’s fees.
4. Will the merchant account have a daily or monthly settlement?
All merchant accounts will have at least one of the settlements. A daily settlement will cost a person less money in the long run. A monthly settlement allows a person to hold on to their money longer than a daily settlement.
5. Will the equipment be owned or leased?
It is better to buy the equipment. It is never a good idea to lease the equipment. This is because a lease will lock a person into an agreement that they probably do not want to be in.
6. Is the equipment used or new?
Most merchant account providers will only offer used equipment because it is harder to update the old equipment. Let them know that only equipment that can be used in many different processors is necessary.
7. Will there be a cancellation fee?
Try to avoid paying any cancellation fees by not signing a contract. There is no need to sign a contract so it is not recommended.
8. Will there be any annual fees?
Most merchant accounts will have an annual fee. But try to talk the provider out of the annual fee.
9. What is the monthly minimum?
This is not a fee but instead it is a way of getting a certain amount of money in the account. If there isn’t a certain amount of money in the account then the minimum will be charged to the account.
10. Will a PCI compliance fee be charged to the account?
PCI fees are a part of the industry, they are nearly unavoidable but there is some negotiating room available depending on your processing volume. Additionally merchant so work with processors that offer assistance in becoming PCI compliant.
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