The Longer You Stay The More You Pay

Fee Increases for Long Time Customers are Standard in Credit Card Processing

Just like insurers, cable providers and other companies with recurring charges, if you stick with the same payment processing or merchant services company your rates will likely go up every year. The pricing is convoluted and confusing, changing processors is a pain and they are betting that you will not notice the increase or switch providers.

Routine Rate Hikes

Team Merchant received an email from one of our processing partners the other day: “The monthly fees to your clients will be increased by $30/month, if you would like to opt any of your clients out, let us know.” This would allow a sentence to be hidden at the end of our client’s statements notifying them of this fee increase. You know, that paragraph of legal jargon that everybody reads so carefully?

I Bet if They Increase Your Rates You Still Won’t Switch.

What changed that the processing costs more this month? Nothing was new or different for our clients. It was not harder to process payments, there are no new regulations or infrastructure changes that would drive the costs up. The only thing that changed was how long the customers had been customers. In the payments industry customer loyalty is often penalized instead of being rewarded.

But how can that be? How can credit card and ACH processing rates increase for loyal customers? It is simple - they’re betting that you won’t even notice it., Or if you do, that you will accept the fee increase, rather than put in the effort to switch. Changing merchant services provider is a hassle. It takes time. The industry is ripe with hidden fees, bait-and-switches, and unfulfilled promises. Even if someone offers you a better price, how can you know it’s actually better? Further, if your solution is working, why fix something that isn’t broken?

Finding an honest expert or a payment gateway consultant that can make sense of everything is a real challenge. That’s why Team Merchant has created a different model. Think of Team Merchant as a fiduciary for the payment world. We review your rates and fees with you every year. We compare your current costs to our original quote to prove we deliver on our promises.

More Money, More Problems Accepting B2B Credit Cards

Business to Business (B2B) companies often dislike or discourage customers from paying with a credit card. High fees, transaction limits and held funds are just some of the problems that can result from large credit card payments to your business.

So, you just hit your transaction limit.

Stripe, Paypal and many other payment processors allow you to sign up instantly, but businesses accepting large credit card payments of $1,000 or more often run into issues. Depending on the processor, they may have a ceiling limit on the amount you can process in a single transaction. Traditional, non-instant merchant accounts are often a far better fit for businesses who accept higher ticket credit card payments. If you process with one of these instant sign-up processors and do not have your own merchant account, you risk having funds held with few options for recourse. These processors can, and often do, hold funds for an undisclosed amount of time which can put merchants in a serious bind.

Risk determines everything.

Fraud is a big problem. Complicating things even further is the fact that customers may have up to six months to dispute a charge from the date of sale. Based on your industry, chargeback history and ticket size, processors make risk determinations based on your profile. Some processors may cap the amount you are able to process, others may not allow you to process at all. By providing some simple financial documentation in advance, proving your business is financially stable and legitimate, you can potentially eliminate these roadblocks before they occur.

For Level-3 B2B merchants, the larger the credit card transaction the lower the fees!

Getting paid for a large ticket transaction feels great, but paying fees on them, not so much. For the lowest possible fees, businesses should see if they qualify for and are receiving full Level 3 and Large Ticket discounted processing rates. With these discounts, merchants can save between 25-75% of the total cost of the transaction. Best of all, there are solutions that can do this seamlessly on the backend, with no additional input. Qualifying for these discounts means that instead of paying almost 3% on every credit card transaction, you can instead pay less than half of that (<1.5%) to accept the same card!

For more information on Large Ticket Transaction discounts or your eligibility, contact Team Merchant today at: 844-805-3862 or contact us with the button below.