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.
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