|
|
TRICKS OF THE TRADE
What
Every Merchant Should Know
 |
TERM
AGREEMENTS
In the card processing industry, the most important part of a merchant
account contract is the "Terms of Agreement"; i.e., how long you as a
merchant are required to remain with this particular source without
incurring a substantial financial penalty. This often well hidden (and not
discussed at time of signing) part of the contract is far more important
than your initial rates, equipment prices or monthly fees. Any term
agreement longer than a couple of months is a very unwise
business decision for the unsuspecting merchant unless a written guarantee
is obtained clearly stating that rates will not be raised during the length of
the term, whether it be one, two, three or more years. It should be
noted that rate guarantees, although often not stating thus, do not apply
to interchange raises; i.e., if VISA and/or MasterCard raise the rates
they charge banks, ALL sources go up accordingly, regardless of what any
company or agent has told you to the contrary.
Term Agreements are undoubtedly the number one cause for merchant anger and
frustration in our industry, and unless you have written assurance of a
rate guarantee for the entire duration of the term, such an agreement
should be avoided at all costs. If your agent representative does
not mention term agreements or bother to show you in writing the specific
length (term) of the contract commitment, then you should run from this
agent and never look back! The very best advice we can offer, which
is too often ignored, is for you the merchant to compel your agent to show
you, in writing within the contract he or she is asking you to sign, the
length of your contract commitment and your penalties for early
termination. Never take the word of the merchant account agent or
company--require them to show you where in the contract the specific terms are
stated regarding the required length and financial penalties for not fulfilling
the required terms.
Why is this so important? Simply put, many even very large banks
and processors have purposely devised a deliberately deceiving merchant
account program, offering initial rates below the legitimate competition and
sometimes, offering a free realtime gateway or other equipment that initially
costs them. Once an unsuspecting merchant is signed into a long-term
commitment, the rates begin to creep up, usually in small increments.
Over time, that initial rate of 1.59% or 2.25% can become 1.99% and
2.99 or even higher. When the merchant attempts to switch to another processor,
he or she finds it will cost several hundred and sometimes thousands of
dollars to get out of the contract term early. A
REAL INDUSTRY TRICK TO BE STUDIOUSLY AVOIDED!
 |
OFF-BRAND
EQUIPMENT
There are three brands of credit card processing equipment that can be
used by virtually all U.S. processors: Nurit (Lipman USA),
Hypercom and Verifone. Purchasing equipment manufactured by companies other
than these three (except software) is very risky at best.
Obviously, if the terminal you invest in can only be used by one or a
few processors, then you are at the long-term mercy of those processors
regarding rates, fees and service. Marketing off-brand equipment
that is only compatible with one or a few processing sources is a major
industry trick. Regardless of the "deal" some slick agent is
offering you on equipment, if that equipment is not one of the three major
brands, then you are making an extremely unwise decision to purchase it. . .
BUYER BEWARE!
 CLICK HERE FOR MORE
VALUABLE
INNINSIDE INDUSTRY INFORMATION
|
[ Real-Time
] [ Hardware
] [ Software
] [ Rates/Fees
] [ NationCart
]
[ EFT Check
] [ Apply
] [ Library
] [ Hosting
] [ Clients
]
[ Tricks
] [ Charity
] [ Company
] [ Site Map
] [ eMail ]
 |
Site Designed &
Developed by
Richard N. Johnson
 |
Miva, Miva Engine, Miva Mia,
Miva
Empresa, Miva Merchant &
the Miva Corp. Blade logo are
trademarks of Miva Corporation. |
 |
|
