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Looking for the Best Credit Card Processing Rates?

Merchant Payments

Watch Out for These Tricks of the Trade

We all want to make sure we’re getting the most value for our money. Whether we’re at the grocery store, car dealer, or retailer, getting a good deal makes us and our bank accounts feel good.

It’s no different with credit card processing. We all want the best credit card processing rates available but it gets confusing. Literally, there are hundreds of different interchange rates from Visa, Mastercard, Discover, and American Express. Those rates on top of gateway fees, transaction fees, and added charges for this and that can make it really hard to discern whether you’re getting a good deal. It’s that vagueness that makes it easier for payment processing companies to grab your attention with alluring marketing messages and tricky sales tactics.

In this article, we will shed light on what those marketing messages truly mean and provide you with some examples of crafty sales tactics you’ll want to avoid.

1. Free credit card processing

Just to be clear, there is no such thing as free credit card processing. There are many constituents in the payment processing ecosystem, and none of them are non-profit. Everyone gets paid – it’s just a matter of who foots the bill.

Free credit card processing simply offloads the costs onto your customers in the form of a surcharge, and the maximum amount allowed is 3 percent. You are still responsible for any costs that are above that amount. Plus, only credit card transactions may be surcharged. You still have to pay to process debit cards and ACH transactions.

While surcharging can save your business money, there may be unintentional implications that actually cost you money in the long run. So be cautious and mindful when making the surcharging decision.

2. Phone call that your processing rates have gone up

This is a particularly deceitful tactic. Businesses will get a phone call from someone who claims their merchant services pricing has gone up and that they need to call back to get a better, lower credit card processing rate. This is a trick to put you on the line with a salesperson from a different processor. A sign that this call is just a sales ploy is if the caller does not identify their first and last name and company name on the call. Often, the message is only a first name with no company identified.

Rate increases are not uncommon, but typically, your credit card processor will add a statement message or send you an email alerting you that costs are going up and why. If you haven’t received any of those messages, the phone call is very likely just a sales trick. Don’t fall for it. Moreover, if you are a Wind River customer, you know who your relationship manager is. If the call you receive is not from that person, it’s most likely a scam.

3.Rates as “low as 0.05%”

This is a misleading claim. The 0.05% rate quoted is the typical debit card processing rate. It does not apply to credit card processing. It’s simply a hook to lure you into a sales conversation.

In order for any processor to accurately quote you rates and fees, they must know something about your processing environment – the cards you accept, the channels through which you accept them, how you run transactions, how much you process, and so on. Checking rates is not a bad thing, but if you do, make sure it’s with a credit card processor that is not being deceitful with its sales and marketing tactics.

4. “Meet or beat” promotion

Understandably, this is a tough one to pass up. Nearly 100 percent of the time, the processor will beat your current rate. Also, nearly 100 percent of the time, the rate is introductory only, and it may require a long-term contract that doesn’t protect against future increases. Often, you will be fed a steady diet of rate hikes or added fees shortly after signing on the dotted line.

5. Teaser rates

Often, these low “Qualified” rates only apply to a fraction of your transactions; the bulk of your transactions will be assessed at higher (and non-disclosed) “Mid” or “Non-qualified” rate. And credit card processors that dangle teaser rates are not the types of companies that partner with you to see if there are ways you can qualify for the lowest interchange rates.

Questions to ask

Many of these offers can appear very attractive to the untrained eye. As with anything, if it seems too good to be true, chances are it is. To protect yourself, ask the following questions and make sure that the answers are put in writing:

  • Have you disclosed all of the rates that apply to my specific situation: interchange, assessments, equipment fees, set-up fees, installation fees, cancellation fees, PCI-related fees, mark-ups?
  • Is your pricing structure bundled?
  • Do these rates expire at any time?
  • How will fees be shown on my merchant statement?
  • Is there a contract required? How long? What are the terms of buying out the contract?
  • How do you deliver customer service? Call Center? Online only? Email?
  • Am I buying services from your company, or are you reselling someone else’s services?

Asking smart questions will put the processor on notice that yours is not an untrained eye. If you would like some extra guidance from folks who evaluate these marketing offers on a regular basis, please give Wind River Payments a call. We’ll help you sort through what is real and what is just another sales ploy. The goal is to help you find the best credit card processing rates for your business.

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