How Can You Tell If a Merchant Account Company is Good?

I have business owners asking me this question all the time, how can you tell if the merchant account vendor you are getting a quote from is a good company or not...?

Just like most business decisions you should always firstly listen to your gut. If you feel uneasy or pushed by a sales rep for any reason or you feel that the potential provider is not being 100% up front with you then find someone else.


Here is a list of some check marks you'll want to make sure are being hit:

1. A good company will ask you questions about your business and make sure they setting you up with the right payment processing solution. A bad one will be pushing for the sale and not asking questions.
2. Cheap prices are usually synonymous with cheap quality and/or poor services. The old expression of "you pay for what you get" really is true. I would do a little research to find out what the current buy rates are from Visa and Master Card online. Just type in visa interchange or master card interchange to find out what the credit card processor is buying the rates at. If the rates they are quoting you are way below that rate then you know something must be wrong. They must be back ending you with tons of hidden fees to make up the difference because no merchant account company is looking to become an investor in your business.
3. A good company does not hide their fees nor makes excuses for them. They will be more focused on services and providing customer support. Look for social proof, testimonials, referrals, ask other business owners who they use, jump on business forums and ask people who have similar business as yours in the general area or region you are in who they are using and are they happy.
4. A good company will openly give you their tech/customer support phone number for you to call at anytime you want to test out their services.

If you tick off those four questions before choosing a merchant account provider you should be in good hands.

Do You Run a Co-op Type Business and Need Merchant Account Services?

It is common for some business types to be set-up like a co-op where a group of services providers like hair stylists or massage therapists etc. will come together in one location and split costs on the store space or clinic office space.

The problem occurs when it comes to getting merchant account services for these types of businesses because typically most merchant account providers in Canada will not allow several different business accounts on the same terminal.

Some of these co-op type businesses can have as many as 6 - 10 people in all sharing one location. Nobody wants to see a barrage of 6 different Point of Sale Terminals all lined up at the check out desk, nor do the technicians want have the expenses of each having their own payment processing solution.

What can these Co-op type of businesses do?

Well, many Point of Sale terminals now have the capability to be set-up with clerk I.D.'s, which can track each person's sales, tips, cash back, etc. Although there can still only be one business account associated with the merchant account this essentially would simplify the accounting.

One brave soul at the Co-op could sign-up for the merchant account and then they could write checks to the other technicians on a weekly or bi-weekly basis minus the costs associated with the merchant account services. This way the costs are kept down for everyone at the Co-op, there is only one Point of Sale Terminal, and the Co-op doesn't have to worry about losing any sales by not offering debit and/or credit cards as a method of payment.

What Will Cause Your 3rd Party Merchant Account To Be Suspended

Some of the fastest factors that will cause your third party payment processing account to be suspended is to do any of the following below:

• Persistent pattern of charge backs - most merchant accounts do not like to see more then a 1% charge back ratio regardless of whether they are 'third party' merchant accounts or 'true' merchant accounts
  
• Poor or inadequate response to customers and a history of unresolved complaints or refused refunds
• Supplying faulty or inferior goods that are not as described in your product description
• Entering customer credit cards yourself which goes against your merchant agreement - do not and say do not take orders over the phone then enter it into your PayPal buy button for people to process their orders - they must do it themselves. If you are want to take orders over the phone you will need to be set-up with a merchant account that handles MO/TO ordering.

It is important that you take the time required to read the terms and conditions to your merchant accounts and know you rights and what the correct procedures are to processing your credit card payments then to be naive and find out the hard way of having your accounts suspended.

If you do run into major issues with charge backs and suspensions I recommend you visit: www.merchant911.org