This fee is assessed by VISA and MasterCard, and if you do not pay it, your merchant services company will have to, and given how thin the margins of profitability are in the industry, very few will foot the bill. Contracts are another tricky area. Technically everyone has a contract since that is just the name of the agreement between merchant services and merchants, but the key is if they have an early termination fee.
This brought another moment of disillusionment with the industry. I worked for a sales office on the east coast, but the processor who owned our sales outlet and handled all the transactions was located on the west coast.
One day, I was speaking with a customer who said that one of our more notoriously scummy competitors told them they did not have a contract. I instructed them to get me a copy of their agreement so I could show them the exact wording stating they did in fact, have a contract.
Once I got my hands on their application, I saw that their legalese read the exact same as ours — word for word, save for one key detail. So even if you sign up through So and So Merchant Services, your money is actually being handled by Megalithic Processor. As soon as you open your account, the sales office has virtually no control going forward, and you will have to call the processor for any disputes.
Given my experience, I believe that some sales offices must be set up to defraud people with the hopes that they will pay the early termination fee, then get set up through another sales office owned by the same processor. Capitalism is all about transactions. The more transactions completed, the more the economy grows. It does not matter who the expansion benefits, so long as we get to say that the economy gained every quarter, and everyone should be satisfied.
Lifetime politicians in the D. Bernie Sanders and Elizabeth Warren changed that, and as a consequence, Hillary Clinton has adopted much of their verbiage in order to stave off a revolt. The culture around the economy is rotten, and merchant services is emblematic of the virus at the heart of it. Merchants get screwed every day, paying rates they never were told about, but this is not entirely the fault of the credit card processors. Frankly, if you call up any salesperson in any industry and take everything they say as gospel without questioning it, you deserve to get ripped off.
We are undergoing a culture change as it pertains to our economy. We used to think that corporate America had our best interests at heart since we were their primary source of revenue, but globalization provided them with an influx of cheap labor, providing more avenues to squeeze profits out of their businesses.
Merchants buy or lease a processing terminal that either hooks up to a telephone line or to an Internet connection. They swipe or input customers' credit or debit card information into this terminal, which sends the data to be verified and approved.
The terminal prints copies of the receipt for the merchant to keep and for the customer to sign, unless they have opted for paperless transactions. After a given period of time--a few hours or a few days--the merchant will close the batch of sales by electronically sending it to the bank, and in a day or two the funds will transfer directly into the merchant's bank account. Weigh up the upfront costs plus the ongoing monthly services.
You may prefer a flat rate payment so you can budget for it. Alternatively, you may prefer to pay fluctuating payment processing fees. Customer service is always key, but having a support system on hand, along with your merchant services, is crucial. Take a look at online reviews for each provider and make sure you check what ongoing support you will receive once you purchase the hardware or software.
Knowing when you will receive your payments is important for a number of reasons. Some payment processors may not be able to process payments as quickly as you need, so this is something you should look into before choosing a provider. Again, you may want to look at online reviews to see what existing customers say about average payment processing times.
Ideally, your merchant services will seamlessly integrate with other pieces of software or hardware, including bookkeeping software or transaction processing software. Choosing a merchant service provider is not a decision you will want to take lightly. There are lots of things to research and weigh before you decide to use one provider over another. The key things to watch out for include ongoing or hidden costs, how fast payments are processed and what ongoing support you can expect to receive should things go wrong.
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