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Should I Leave My Current Merchant Account Provider?

Most of us have felt stuck with a bad investment at some point in our lives. Thinking that it might be worse somewhere else, we stick with the bad investment hoping that it will eventually work in our favor. We also see this happen to many small businesses who feel stuck with their current Merchant Account Provider. Finding a new Merchant Account provider can seem complicated and overwhelming and at times it may seem easier to just stick it out. Does this sound familiar? “I will wait just one more month, continuously hoping to receive a rate reduction, free equipment or better services, just to postpone leaving my current provider again and again.”

So how do you know when it is time to leave your current merchant account provider?

In our 20+ years of experience in Merchant Account Services, we have repeatedly experienced how sticking with the wrong merchant account provider can cost your business a great deal of money. Without proper plans for a small businesses current growth and future growth, the wrong merchant account solution can be a nightmare. A good merchant account provider is constantly monitoring your merchant account to make sure you are receiving the most competitive fees for your situation.

Why Would My Fees Change Over Time?

Most merchant account provider’s can you give you the best rates with an established credit history and business history. Most new businesses are not eligible for these fees and have to pay slightly higher fees to offset the risk. However, as you gain credit and business history, your merchant account provider should be ready to incorporate that into your account. This means that you fall into the lower risk category and your fees should reflect this.

We typically recommend our customers spend time every six months, looking through their merchant account statement as well as talking to their sales agent just to ensure that they are always getting the best rates and services possible. If it’s a hassle for you to do this with your current merchant account provider we urge you to consider looking for a new provider.

Things to Look for When Reviewing Your Merchant Account

Did I Sign Up with My Banking Institution Because It Was Convenient?

It is not uncommon for small businesses to prefer the convenience of setting up a merchant account directly through their current banking institution. Banks oftentimes advertise “exclusive” or “customized” merchant account solutions to attract businesses.  We have often heard from customers that they will receive specialized services that no one, but their bank, could offer such as next day funding for “free”. That is absolutely not true. Most Merchant Account Providers can match everything that a bank can offer, including next day funding.

Additionally, it has been our overwhelming experience that setting up a merchant account through your banking institution is generally much more expensive then setting it up through a merchant account provider.

Do My Fees Keep Increasing?

SecureGlobalPay is always on the lookout for fee increases. This can happen for a variety reasons and is often times fixed with a simple adjustment in how you are processing credit cards.

A common example is a small business who is being charged fees on a tiered pricing structure. The fees for this structure can depend on multiple things such as how they accept a credit card, whether they verify the card holder’s address, whether they collect the CCV code, whether they close their batch on a daily basis and much more.

If all this information is collected and sent to the processor accurately, the merchant should receive the lowest rates possible. The credit card transaction will be considered lower risk and should qualify as the most qualified transaction for that method of acceptance.

However, the merchant might find themselves jumping up to a higher fee category if a new employee starts accepting credit cards over the phone. If the employee begins to manually enter the information into the terminal, instead of swiping the card and not following the proper protocol.. The fees will suddenly increase. This is due to the transaction being labeled a higher risk category transaction because a card is not present.

A decent merchant account provider will be watching your account and notice these fee increases. Sometimes it takes very little time to rework a terminal system so that card-not-present transactions can receive reduced fees.

Unfortunately, we’ve have had customers come to us who were charged extra fees for years that resulted in thousands of dollars that could have been saved had their merchant account provider educated them to be on the lookout for these fee increases.

If you notice your fees continue to increase you should receive a detailed report from your Merchant Account Provider. It should outline why the fees have increased and possibly how to fix the increase in fees. A good merchant account provider works for you and is constantly on the lookout for your business, making sure that you are protected.

Are My Credit Card Fees Unpredictable?

Getting the right merchant account plan can often times be critical to your success. As frustrating as it can be to open up about the financial details of your business, a good merchant account provider will want to know as much as possible. This is the only way they can establish predictable fees.

We’ve had a customer who disclosed a detailed business plan on how he was going to be making lots of money in a short period of time. However, the selling season was sporadic at best. He also needed a variety of different methods to accept credit cards including mobile, card present and telephone.

We recommended an interchange pricing plan that would allow him to pay the same fee per transaction regardless of month-to-month volume. Even on a tiered pricing plan, your fees should still be predictable. You should know how much you will be charged for low risk transactions as well as high risk transactions.

If you are looking for predictability in fees, your merchant account provider should make it easy for you to switch to the pricing model that works best for your business.

Am I Receiving Dedicated Customer Service?

When it comes to processing credit cards, you need a merchant account provider that you can call at any time, with questions about your account. You need to feel reassured that they are watching to make sure everything is running smoothly. If you don’t have easy access to your merchant account provider, you can lose money waiting for answers. It is a big deal and one of the most important things to consider when deciding whether to switch merchant account providers.

 

Questions to Ask When Leaving Your Current Merchant Account Provider?

Are there any fees for leaving early?

Merchant account processing has come a long way in the last few years. It was very common, when signing up for a merchant account to commit to a 2-3 year contract to get the best pricing. If you left, there might be huge fines and fees. While some merchant accounts today still operate that way, it is no longer standard to have to commit to your processor for any length of time. If you feel locked into a contract or are feeling held hostage by your POS system, we highly recommend you contact one of our sales Staff at 805-855-0214 to see how they might be able to assist you.

Please note, that credit card companies are allowed to automatically renew a contract for a certain amount of time. They just have to prove that they tried to contact you and did not get a response from you. We recommend that you are aware of when any and all contracts are about to end. You must always continue to communicate your interest in a merchant account with your merchant account provider.

Consider What Will Happen to All Hardware Terminals

Before terminating your current merchant account contract, we recommend that you find out who owns your credit card processing equipment and POS systems. If you are leasing the system through your merchant account provider, then understand that they will want all equipment sent back to them. This means you will need to lease or buy entirely new systems.

If you did in fact purchase the system, then make sure your new merchant account provider has worked with the systems before and all their credit card processing software is compatible with the newest systems.

How to Gracefully Exit

In order for you to close your merchant account, you do need to contact your current merchant account provider and cancel your account. If you only decide to stop processing transactions, you may still be responsible for monthly service fees. We recommend that you receive written proof that your account is actually closed before you completely walk away.

SecureGlobalPay is always striving to make your merchant account experience a positive one. Please call us today with any questions!