Ok, so most of our readers know by now, about, discounts and authorizations and such, let’s dive in to the unholy waters of “other fees”. Let’s define what they mean and who get’s the money.
Set up Fees:
This fee may be charged by your sales professional for the set up of your account
or for the Terminal or gateway. Some acquirers provide the equipment or gateway for no charge, they typically charge more for service or have a high termination fee to make up for the out of pocket expense. The key here is to know if you are paying for the third party or gateway or if the fee is merely to set up your account. So the real question is are we “licensing” the gateway or “paying” the sales professional to write the deal? Typically, there is “wiggle room” in these fees, but know that you’d not work for free, so should your sales professional? If it’s actually a “licensing” cost, well, that money is gone and not much to get around it unless there is some type of “promo” going on because sales are slow. If there is “jump” because they don’t last.
Many acquirers name their monthly fees differently. Be sure to ask what all
your monthly fees amount to and what you get for those fees. Most accounts have some form of a
monthly fee often referred to as a customer service fee, statement fee, maintenance fee or account fee.
Do not sign up for any warranty or maintenance program. You will be better served paying for any
equipment if it malfunctions and/or buying your own supplies when needed.
Annual Fees: Some acquirers charge an annual fee. Make sure you get value if you are paying
an annual fee and you clearly understand what that fee entails.
Most acquirers charge a minimum fee that will be assessed if your combined
discount and transaction/authorization fee do not exceed a certain amount. The minimum fee is
assessed by subtracting the amount you were billed for your discount and transaction/authorization fee
from the minimum fee amount. Famous trick applied upon merchants who “demand a super low rate and get it” because they never pay it, instead the representative factors in the rate they want to charge in to the “minimum rate” and puts the fee in that spot.
Third Party or VAR Fees:
Third parties can be a needed and necessary component of your
merchant account. While it would be too long to list all third party fees here, it is important with any
third party to compare their fees with at least one other similar third party to ensure the fees are in line
with their competitor. Common third parties include Internet Payment Gateways and wireless
Early Termination Fees:
One of the widest disparities in acquiring pricing is in the Early Termination Fee. This fee is often overlooked because it is not assessed until you close your account and is not associated with your account set up. Be sure to clearly understand your Early Termination Fee. Never agree to an Early Termination Fee that is charged regardless of when you close. Buyer beware. Free terminals often aren’t free and are “paid for” on “exit” as an alternative Early Termination Fee.
Contact Merchant Zoom today and we’ll consult with you on your best options.
Headquartered in Pinole California, MerchantZoom, Inc. was founded by Wally Arakozie. Previously employed by one of the largest merchant processing companies here in California for nearly a decade. Since the company’s beginnings MerchantZoom, has grown into a reputable national merchant provider. Along with delivering state of the art technology and competitive rates, MerchantZoom, thrives on personalized local customer service and support. In order for your business to ZOOM!
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Content Release Date April 24, 2017 – MerchantZoom Inc.
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