When a merchant goes shopping for a credit card processor, there are a number of factors that he or she should consider, including the type of credit card processing required for their business (POS retail, mobile, Internet, wireless), the reputation and reliability of the processor, the customer service and support they offer and, of course, cost.
On that last point, TransFirst® has some advice for merchants when it comes to processing fees: Beware the teaser rate!
A teaser rate is a low, adjustable introductory rate whose sole purpose is to attract potential customers to a credit card processor. Teaser rates typically fall well below the going rate of other processors, and the reason for that is simple: They don’t last very long. Once a teaser rate expires — and it always does — it rises to a normal or above-normal level that locks in for the duration of the contract. The old saying “If it seems too good to be true, it probably is” definitely applies to credit card processing teaser rates.
Savvy merchants recognize teaser rates for what they are — a low, unsustainable rate structured to appeal to businesses that make their decisions based solely on price. It’s similar to a merchant having a sale, but even sales have an endpoint. When that point is reached, the price reverts to its previous level (or sometimes even higher). That’s because the merchant can’t afford to maintain the lower price indefinitely — and neither can credit card processors.
As attractive as teaser rates for credit card processing may appear, look beyond the price hype for substance when choosing a payment processing provider. After all, the provider you choose will be like a partner in your business for a period of time — possibly years — so you want to know upfront that it’s a reputable company you can rely on to deal with you honestly and professionally, and someone you can do business with comfortably.
When it comes to credit card processing rates, it’s important to understand that every payment processor pays the same “wholesale rate”, which covers interchange, assessments and other fees that are set by the credit card companies and issuing banks. Also understand that there is no one flat rate for processing all credit cards. That’s because all cards are not created equal. Basic cards incur one interchange rate and transaction fee, debit cards are processed at a different level, and rewards and corporate credit cards at another (higher) level. The teaser rates you see advertised do not reflect this disparity. Depending on the types of credit and debit cards you accept, that attractive-sounding teaser rate may barely apply to your business.
When negotiating with a payment processor’s sales rep, always get in writing the rate and transaction fees you will be charged for the majority of your transactions. They should be able to provide you with this information by reviewing a recent monthly statement from your current credit card processor. If you’re new to accepting credit cards, the rep should be able to use their experience in the industry to give you an idea of how your transactions may breakdown by card type and calculate a rate from there.
At TransFirst, we don’t believe in teaser rates. We believe in superior service and products, top-notch customer support, and processing fees that are fair and cost effective for your business needs. Talk to one of our trained representatives today to find out the many benefits of credit card processing for your operation.