Many Businesses Waste Money on Credit Card Processing

Many businesses continue to use the same credit card company for years without checking the rates. Often, these same businesses could save hundreds or even thousands of dollars by comparing these rates to a direct processor of MasterCard and Visa.

Many businesses have their merchant account through their bank. Most banks are a third-party processor of credit card processing. They farm it out to direct credit card processors. Many of the same merchants are afraid their bank will be upset if they changed to another company. Instead, maybe they should be upset they have paid extra fees for possibly years. The bank should be more concerned with keeping their merchant happy instead of the other way around.

Many businesses may feel they have an awesome rate. However, each business is different and may have hidden fees. There are different rates charged for credit cards swiped in person, manually put in and received through mail order or the internet. Also, there are many fees that some processors will attach to the merchant accounts. The key is to figure out the total expense charge monthly to compare companies.

Why won't merchants change their accounts? There are many reasons, but the primary reason is resistance to change. They are happy with the way things are. The funny part is that many of these same businesses will waste a lot of effort and time to save small amounts of money. Usually, it would not take more than 20 minutes of their time to see if a processor of MasterCard and Visa can result in added savings. I can't think of many other ways to add to the bottom line with little work.

Other reasons for keeping the current merchant account provider is the last time they changed it was a nightmare. Also, many merchants don't think twice about their credit card processing unless, they have an issue. They are often quick to change at that point.

Many of the credit card processors have penalties if the merchant cancels the account early. However, even with these penalties, the savings can still be significant.

One last thing to remember is there are many gimmicks used to attract to switch credit card processors. It could be low introductory rates on one category of credit cards, or for a limited time or something free for switching. Don't be fooled by the gimmicks and look at the overall costs of credit card processing.

Many merchants who have good control of their operating expenses do a poor job controlling their credit card processing fees. They should strongly consider reevaluating their current merchant accounts to see if they qualify for the best possible rates.