Many factors influence the rate that a merchant service provider can offer to you. The age of your business, and your credit standing, are only two of those factors. Whether you’re new to searching for merchant accounts, or you want to get better rates, it’s helpful to understand what influences your merchant account rates.
The Basics of Fees
There are two types of rates you can receive for merchant credit card processing: interchange and a flat fee. The flat fee can seem appealing, but it’s often not as attractive as it seems. The interchange fee, by comparison, offers a more complex fee structure with a fairer pricing tier depending on which cards you slide in a given transaction. So with a flat fee, you might be paying 2% on a card that only requires 1.3% on interchange. That savings isn’t much, until you compound it over time.
Size and Age
If your business hasn’t been around for very long, and hasn’t had time to grow, you’re going to face rates that a bit stiffer than those who have grown over time. If you plan to use only online credit card processing, then you may be classified as a high risk merchant account. Those users tend to pay more upfront for the same services.
Don’t panic! Given some time, and proper growth, your business will see its risk factor reduced. Sometimes, especially if your high risk, loyalty can pay off in this regard.
Another avenue that can influence rates is the volume discount. Some merchant providers offer a discount for processing a certain volume of sales. Be wary of taking such discounts if you aren’t sure you can meet those requirements.
Charge.com Payment Solutions Inc. offers industry leading customer service and the latest technology so businesses can accept credit cards online or in store.