Don’t Sign a Merchant Account with Your Bank

There are some clear reasons not to sign with your bank locally for a merchant account. Most often a small business owner will obtain merchant account services through a local banking institution. The average small business usually does this without considering any other options.

There are three reasons why small business owners sign up for locally based merchant services.

First they assume that a local bank will be more cost effective.

When it comes to rates, fees, and pricing local banks are generally higher. Most local banks charge an upfront application fee for merchant accounts, these charges would not be incurred if applying through a direct reseller that was not local. Some banks act as a reseller of equipment or services for other outside entities. Credit card machines, processing terminals and other equipment are resold at much higher prices from local banks. Again this would not be the case when dealing directly with the merchant service providers.

The next thing business owners assume is that a local bank will have better customer service.

The fact is that a local bank generally is not in charge of their customer service handling. The responsibilities and decision making for customer issues is handled by the provider of merchant services. All customer service issues must therefore be verified or routed through the chain of command, which leads to holding on or call backs for big decisions. For most businesses this is not the customer service standard that is expected.

The final problem is that most business owners genuinely feel a local bank will be more trustworthy.

More precisely, they assume that there will be more loyalty given to the local customer. You should never give extra considerations to any local institution over others for this reason; this is simply an assumption that is made by all types of consumers. It is the same as saying that just because you drive your car locally, that it will get better gas mileage than if you were in another state. It is best to judge providers of any services based on facts, rather than anything else. Always do comparisons before making any purchases of banking services or otherwise.

Always keep in mind that your banking business is just as important as anyone else.

It is not the fault of the consumer that these are the myths that are sold to us through advertising and financial marketing campaigns. Yet the truth is it would be wiser to consider setting up a merchant account outside of your local area. The small business owner seeking advice about merchant account services or credit card processing should not rely on the industry for information. Make up your mind based on being informed and be willing to take your time. Sell yourself on the best services and you will not get sold something that you do not want.

About author

SMB Reviews
SMB Reviews 473 posts

SMBReviews is committed to providing small and mid-sized business owners with the information and resources they need to select the best service or product for their company.

You might also like

Articles

Facts About Women Business Owners in the 90s

5/95 * Women business owners are starting businesses at twice the rate of their male counterparts. (Source: SBA) * Women employ 11 million workers, more than the Fortune 500 worldwide.

Articles

Selecting Your New Office Space

Selecting the right office space is crucial to the success of your business. There are many factors to consider when selecting office space. The needs of your company and your

Articles

Best Practices for Client and Customer Invoicing

For many small business owners, especially those at the beginning of their career, cash flow can become very tight from time to time. When payments don’t come in from customers

0 Comments

No Comments Yet!

You can be first to comment this post!