Merchant Account Guide

We know that choosing a merchant account can be difficult, mostly because we have done it ourselves many times. Owning both an online and brick and mortar business, we have researched and tried many merchant accounts. Here is what we learned matters when you are looking for a merchant account and who we recommend.

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What's Important When Choosing a Merchant Account?

There are many, many things that you can look at when you open a merchant account and it can be confusing. The terminology is tricky and there is a lot more to look at then the rate published on the merchant account provider's website. In fact, that rate hardly ever what you will actually pay for credit and debit card processing. We believe the most important things to look at when choosing a merchant account are:

Total Fees

Many people make the mistake of only looking at the advertised rate provided on the merchant account website. Although that sometimes can be a good sign, it is hardly ever accurate. Discount rates, or the percentage charged for processing each purchase, vary from transaction to transaction. In fact there are over 150 different transaction types that each have different discount rates.

Additionally there may be transaction fees charged for each purchase and processing fees. In order to truly understand how much the fees are, call the merchant account company and ask them to explain the fees for your five most common transaction. For example, call and say, the customer makes a $50 purchase with a debit card, what are the total fees for that transaction? Then ask, what if they made that purchases with a credit card? What if they made it over the phone instead? Then ask how much it would cost if they returned their purchase? The more questions you ask about different transaction rates, the better you will understand the costs.

Finally, ask about the costs for batch processing, reports, and chargebacks (returns). Having all of this information will help you to truly understand the difference between the total costs of different merchant accounts.

Contract Length

Contract length is a very important variable to consider when signing up for a merchant account. Many merchant account companies will make you sign a minimum contract, many times for at least two years. This locks you into a set price and transaction fees and give you no room to negotiate or switch companies with a huge cancellation fee. We recommend always looking for accounts with either no contract or a month-to-month contract. This is especially important if your business is brand new.

Customer Support

In our eyes, customer support should be an extremely important consideration in any merchant account decision. Having a problem with your account or the equipment can cause you to lose valuable time and money. Always look for a merchant account that has 24/7 support with dedicated agents for account problems and technical support. If you call to learn about an account and don't hear back quickly, or wait for hours on hold, it's not a good sign.

Processing and Services Available

Merchant accounts can vary widely in both the way they process payments, how quickly they process payments, and what types of merchant account services they offer. We recommend finding a merchant account with real time processing so that you can check on your account any time you need to and have up to the minute information. Some companies take up to a month to report the data back to you.

For services available, in our opinion, it is best to choose a full service company with all the bells and whistles. Right now you might just want a simple point of sale credit card machine, but what if you want mobile processing in the future as your business expands? Maybe your business is only online right now, but what if you want to open a store later? Or start taking payments from clients over the phone? Chose a company with a wide range of options that can grow with your business.

Recommended Merchant Account Providers

Now you are probably wondering, given those factors and the research we did, what companies do we believe provide the best service for merchant accounts? Here are the winners.

#1: Merchant Warehouse – Best overall merchant account provider

• Best rates and total fees. Will match any competitor's rate and known to have the lowest rate in the industry
• Will give you $100 if they can't match a competitor's rate
• 99% approval rate, normally takes about 24 hours
• Merchant accounts accept all major credit cards including Visa, American Express, and Mastercard
• There is no start up or set up fee for applying for and setting up and account
• No contracts and you can cancel at any time
• Great customer service agents who walk you through all fees so you understand – call 1-866-734-8450
• Assist you in choosing the right equipment and packages for your business
• No pre-packaged accounts, each account is set up and customized for your needs
• Real time access for transaction details and reports - with many merchant accounts, it can take days or weeks to see transaction details and reports
• Customer service available 24 hours a day, seven days a week with specialized assistance for account and technical support
• Large selection of point of sale credit card terminals
• Multiple online merchant account options including Authorize.net, Linkpoint, and Verisign, and an in house system that is less expensive that almost all competitors.
• Free terminal program
• A+ rating from the Better Business Bureau (BBB) and Independent Sales Organization of the year by the Electronic Transactions Association (ETA), a regulator in the merchant account industry.

#2: Authorize.Net – Strong online merchant account provider

• Great off the shelf solutions for creating online stores and shopping carts
• Competitive rates, although higher than Merchant Warehouse
• 24/7 Customer support
• Low start up and application fee
• Low monthly costs for most websites
• Large selection of brick and mortar point of sale equipment, from resellers

#3: Merchant Express – Strong in person merchant account provider

• Competitive rates, although higher than Merchant Warehouse
• 24/7 customer suppor
• Wide variety of services including brick and mortar and online merchant accounts
• 98% approval rate
• $0 in start up costs and application fees