by Julie Franke ETA CPP
There are so many things to think about when owning a business. Payments are the most important part of a business and payment systems are often overlooked. Accepting payments is how your business will stay in business and should not be set up as if you are setting up a utility. Payments systems should be unique to everyone’s business because each business has its own unique processes and systems. Business owners need to be sure the partner they have in payments is a partner that is looking out for the most important part of their business.
These are a few of the specific issues that many business owners need help in navigating. This is not an exhaustive list.
- There is no such thing as a free merchant account - All accounts are subject interchange fees to card-issuing banks, assessments to the card brands (Visa, MasterCard, and Discover), and a markup of some sort to the processor. It is unlikely your sales agent is paying this for you unless they are making up the cost somewhere else.
- There is no such thing as a “wholesale merchant account.” - The closest thing to wholesale is Interchange and all credit card processors are subject to the same fees for interchange. Processors use the terms “wholesale pricing” as a marketing play.
- Your bank is not the best source for merchant processing - It seems like it would be easy and seamless to have all of your accounts housed in the same place. However, your merchant processing account is not through your bank just the sales agent is. Very few banks own their own processors. They have sales agents that work in the bank for third party processors. Merchant account managers change often in bank branches so often you will have an individual managing your account who does not know you or your business.
- Flat rates are not the best option for most businesses - Flat rates are designed to cover the cost of all cards that you accept without taking into account any of the actual dynamics of your business. These flat rates are not even based on industry averages, they are based on averages across every industry. An account manager that can explain the best pricing structure and understand the complexities of interchange when setting up your account will save you the most money in the long run.
- Shopping by rate will not give you actual cost - When reading your merchant statement, the rate you were quoted by your sales agent is approximately 25% of the overall cost. Having a sales agent that can explain 100% of the costs and help you understand quotes given by other agents will be most cost effective in the long run. Most sales agents only compare where categories are the same (the rate) and don’t bother to compare all of the fixed costs.
Bonus Tip - Using a Certified Payments Professional (ETA CPP) when setting up your merchant account is a way for you to know that you are working with an expert in the Payments Industry. These individuals are certified through the Electronic Transaction Association (ETA).
The ETA CPP program sets the standard for professional performance in the payments industry and is a symbol of excellence. It signifies that an individual has demonstrated the knowledge and skills required to perform competently in today’s complex electronic payments environment.
Discovering whether or not your sales agent is certified is as simple as vising ETA CPP Registry and inserting the sales agent’s name (I did find that some names needed to be entered in all caps).
Electronic Merchant Services is structured so that all accounts are managed by a Certified Payments Professional. If you are looking for a new merchant account or would like to have someone help you navigate the complexities of what you currently have in place you can reach us at firstname.lastname@example.org or 208-273-5575.