When eCommerce appeared as a brand new concept, it wasn’t affordable. Nowadays, there is nothing complicated about eCommerce, and most banks and payment processors consider it high risk.
Points to Consider When Turning to a Payment Processor
When applying to a payment processor, merchants should focus on several important issues before signing a processing agreement. It is critical to research and get a proper understanding of what you are getting into. Below you can find several important points to take into account before you enter into a contract with your processor.
- Contact Term and Early Cancellation Penalties
Contracts have a duration known as the “contract term.” Major processors in the US and Canada have a contract term. As a rule, contracts have an early cancellation penalty. Most processors charge an early cancellation fee, which is based on the monthly fee. A cancellation fee should be addressed before signing the agreement.
- Interchange Downgrades and Rate Fluctuations or Hidden Fees
After you’ve signed the contract with your processor, you may not receive the pricing promised by the sales person. The rate to be paid may fluctuate based on the type of the card used. The reason is that the “interchange” cost or the cost from MasterCard and Visa depends on the type of the card used. Read the merchant agreement to make sure you would receive what was promised.
Focus on the clauses related to rates, downgrades, and assessments from the card associations such as Visa and MasterCard. Find out if there is anything that might be a surcharge, and make sure you understand the pricing before you sign the contract.
When receiving an offer that sounds too good to be true or is below interchange, use the competition in the field to get the best for you. With a true professional in the field like EMB, you can get a reliable and affordable eCommerce merchant account for your company. EMB, #1 high-risk processor in the US, offers one of the lowest rates in the industry. EMB will do everything possible to support you and help you succeed.
- Terms and Conditions of Your Merchant Agreement
The terms and conditions of the merchant agreement are included in your application paperwork. They regulate the service provided and the relationship between your business and the credit card processor.
Merchants are usually frustrated because of the fluctuating pricing. The thing is that some processors don’t give a proper explanation during the sales process. So don’t fail to read the T&C of the merchant agreement before entering into it and providing your application.
- Volume Commitments
Some merchant agreements include volume commitments that must be satisfied by the merchant. This means the merchant must process a certain amount of dollars each month. If he/she fails to satisfy this volume commitment, the discount rate can go higher or certain financial penalties can be put on him/her. Find out if there are any volume commitments in the processing agreement.