What Every Business Needs to Know About Their Merchant Service Provider
A staggering 77% of businesses have flat-tiered pricing when it comes to their merchant accounts with some saying they prefer it to other pricing structures. Sadly, these businesses are ill-informed. You may wonder why that number seems to be so surprising. With a little education, these businesses might want to change their thinking. Learning a little more about your merchant fees can save you hundreds if not thousands of dollars. Here is why:
Flat Tiered Pricing
Many merchant companies will offer a seemingly low rate quote, however very few transactions, if any, will actually qualify for this advertised low rate. Major sellers of merchant services fail to educate their prospective customers on just how they actually qualify for this rate. They fail to disclose that unless it meets one of three hundred or more criteria, the mark-up is far from the low rate they are expecting.
An example of just one of these complicated criteria would be if a customer uses a credit or debit card at the gas pump and is prompted to enter their zip code, merchants that require this will pay a lower rate than one that does not. This is one of the many things that allow your provider to jack up your rates because specific qualifications are not met. Tiered pricing is complex and you often pay double what your actual low ball quote was.
Interchange Fees
Some merchant service providers, National Processing being among them, are firm believers in client education. Forthright discussions about pricing for a structure called interchange pricing will build mutually beneficial long-term relationships. Interchange pricing provides you with an understanding of the exact amount of compensation the merchant provider is earning on every single one of your transactions.
This stops your provider from collecting massive profit generated from the confusing qualification system of flat tier pricing and is designed to be capped at a very specific and transparent rate. This is how the structure offers maximum savings for merchants.
Major providers use this lack of knowledge to generate millions of dollars in profit for themselves. By not taking the time to dig deep into the true rates that you are paying you are allowing them to take money right out of your pocket. With a little education you can find out not “if” but “how” you can start saving money. Allow National Processing to audit your merchant statement and start seeing monthly savings now.
