Merchant Account Rates - Only Half the Story

Shannon Andrade |

May 31, 2012

What are your Merchant Account Rates?

This is a question our sales team hears throughout the day. So why doesn’t Merchant Warehouse just post our rates for merchant accounts on our website so that customers can compare pricing? The answer is a bit more complex than you may expect.

Simply stated, if you shop for a merchant service account by focusing only on rates, you will end up paying too much.

For many merchants, the merchant account rates can amount to only a small portion of their overall cost. If you only consider merchant account rates, you are excluding a long list of potentially costly factors such as credit card equipment, start-up or termination fees, annual fees, contracts, monthly minimums, statement fees and many other expensive pitfalls.

Contrary to what some companies would like you think when they boldly advertise seemingly low rates, there is no “standard” rate for merchant accounts for pricing comparison. Visa® and MasterCard® each have hundreds of different merchant account rate categories based on the type of card, environment in which it is accepted and whether or not all the cardholder information is collected properly and accurately. These categories are then consolidated by each processor into groupings with averaged rates called “qualified,” “mid-qualified” and “non-qualified.” The less “qualified” the transaction, the more you are charged.

So, the next time you are looking for a merchant account, remember to avoid the, “What are your rates?” question. Instead, try to focus on the overall expected cost of processing and factor in all potential fees. If a company guarantees to have the lowest rates, ask to see it in writing. If they have the guarantee in writing, you will quickly realize that these low merchant account rates only apply to a very small fraction of your credit card transactions.

Hopefully, it is now easy to understand why we do not post rates for merchant account on our website, as advertising them can become confusing and potentially deceptive.

Merchant Warehouse guarantees to have the lowest overall costs of processing and we put it in writing here. You can count on our professional staff to educate you on all your options and advise you on how to get the best possible rates for your specific business situation.