When you aren’t familiar with cars, you might pick your auto mechanic by chance. You just have to hope they’ll be honest and won’t rip you off. When you aren’t familiar with cars, you might pick your auto mechanic by chance. You just have to hope they’ll be honest and won’t rip you off.
The same goes for business owners and their merchant processing companies. Without familiarity with how merchant processing works, most business owners don’t know how to weigh their options and potentially save themselves thousands of dollars.
Here are a few tricks that (unethical) merchant processing companies use to reel in unsuspecting business owners.
Misleading Rate Quotes
A payment processor might advertise a low rate without explaining the rate only applies to “qualified” charges, typically made using debit cards and non-reward cards. Purchases with rewards cards or business credit cards usually fall into the “mid-qualified” or “nonqualified” categories, which means higher processing costs for you.
In other cases, processors may initially charge a low rate and then raise it over time. Some processes even include text in their fine print stating they can raise their prices at their own discretion, which could mean a major price spike within the first three months.
The merchant processing industry is notorious for this. Even if your rate is reportedly 1.5% “no matter what,” some credit card processors add surcharges they legally don’t have to disclose, legally. Then, your effective rate is closer to 3% by the end of the month.
Thankfully, you don’t have to navigate these deceptive strategies as an AFEUSA member. You can get exclusive benefits through our nationally trusted partner, First American! The benefits include:
- Free EMV chip-compatible mobile card reader ($90 value)
- 10% discount on your monthly fee
- A hosted Payment Page Builder, allowing you to quickly build a page within your website to accept payments online.
- Shopping Cart platform to allow your customers to itemize their purchases with one easy payment.And much more!
Become an AFEUSA member today and take advantage of your discounts and freebies today!
Article by Charles Jackson, President of AFEUSA