4 Must-Have Merchant Account Features

This article will outline the four major features to look for in a great credit card processing account. There’s a lot to consider before committing to a merchant account and this article will outline the broader points. I still recommend that you do a little more digging to get to the finer details that can … Continue reading “4 Must-Have Merchant Account Features”

This article will outline the four major features to look for in a great credit card processing account. There’s a lot to consider before committing to a merchant account and this article will outline the broader points. I still recommend that you do a little more digging to get to the finer details that can also affect which account and provider is your ideal fit.

Interchange Pricing

Interchange pricing was once available to only the largest business, but it has steadily been making its way into mainstream. Interchange pricing functions by applying a standard mark-up to the actual processing cost for each transaction. Typically called interchange plus or cost plus, this type of pricing is much less expensive and more transparent than the currently more popular tiered merchant account pricing model. Start-ups and smaller businesses may still have a tough time finding interchange pricing. If this is your situation, try using a comparison site like CardFellow to get quotes from multiple providers. The competition on these sites usually produces better rates and fees.

No cancellation fee

Believe it or not, contract terms that carry hefty cancellation fees aren’t the norm in the credit card processing industry. Slowly but surely more and more merchant service providers are offering month-to-month accounts in order to stay competitive. The best merchant accounts don’t have a cancellation fee.

A knowledgeable, dedicated representative

The last thing that you want to do when you need assistance is to sit on hold waiting for “the next available representative.” The best merchant account will have a dedicated representative that you can call when you need help. There’s real value in building a relationship with your merchant account rep. Even better is finding a local representative that can deliver supplies or loaner terminals if you’re in a pinch.

Value Aside from Rates and Fees

Low rates and fees are important when you’re looking for the best merchant account, but they’re not everything. The best accounts have value in other areas as well. Look for things like universal credit card machines and gateways. This will allow you to switch providers if need be without buying new equipment of modifying your existing e-commerce web site.

Borrowing a little from the earlier point, look for an account with excellent customer service. Think about what’s best for you in terms of customer service. Would you rather have a local representative that you can call when you need help, or are you fine with calling the national processor from a toll-free number?

It’s tough to grind the aspects of a great merchant account into four quick categories, but this should get you started. Again, do a little more digging for some comprehensive merchant account information if you’ve got a free moment. Merchant processing is typically one of the largest recurring businesses expenses and they’re certainly deserving of your time.

Determining The Best Merchant Account Category For Your Business

Unlike certain clothes you buy, merchant accounts are not, “One size fits all” or “One type fits all”. The type of merchant account you’ll need for your business will depend on the type of industry and business model.

Some businesses actually need two merchant accounts. For example, if you run a brick and mortar retail store and sell products from that store through a mail order catalog; you will definitely need to have two separate merchant accounts – retail and mail order – to cover each division.

One merchant account will not do the job because of the different types of transactions you’ll be processing. Mail order sales shouldn’t be processed through a retail merchant account because they should be processed with a “card not present” merchant account. Retail sales should be processed with a “card present” merchant account. Switching the two will result in higher processing fees (mid-qualified or non-qualified discount rates).

Card Present Merchant Accounts

A “card present” merchant account is any merchant account in which the credit card and customer are present at the time the credit card is swiped through the terminal or magnetic card reader.


A wireless merchant account is a one that is used with a wireless credit card terminal. This type of account allows a merchant to accept credit cards on the go and obtain a real-time authorization for the transaction. Wireless accounts have low rates and fees like retail merchant accounts but the monthly fees are higher.


A retail merchant account is one where the majority of a merchant’s transactions are physically swiped through a credit card terminal that is connected to a land line phone. Retail merchant accounts have the lowest discount rates and transaction fees and are the most common type of merchant account.

Store and Forward

A store – and – forward merchant account is an account that allows a merchant to accept credit card transactions on the go and forward them to the processor at a later time. This type of account functions like a wireless merchant account in that it is battery powered. The difference is it doesn’t provide a real time authorization. It provides the same low rates and fees as a retail merchant account and is ideal for businesses that have small average tickets. Once a phone line is present, you can plug your terminal in and it will then forward the transaction information to the processor.


A restaurant merchant account functions differently from the other types of merchant accounts because of how tips are charged. Once the credit card is authorized then the grand total of the meal with gratuity plus any pre-meal spending on drinks or snacks.

Card Not Present Merchant Accounts

A “card not present” merchant account is one where neither the card nor the customer is present at the time of the transaction; such as mail order or telephone order. The credit card information is manually entered into the credit card terminal. These types of merchant accounts are high risk and are charged higher processing rates and fees.


Internet merchant accounts are used by businesses that sell products or services online and wish to accept real-time credit card payments. The majority of the sales are generated from a website.

Mail Order (Moto)

A mail order merchant account is one that is used by businesses that will be manually entering the majority of their credit card transactions on the keypad of a credit card terminal. Mail order businesses take credit card orders over the phone, by mail, or out in the field. They have the lowest processing rates and fees of all card not present merchant accounts.

Touchtone Telephone

A touchtone telephone merchant account is one that will allow you to process credit cards using touchtone telephones without a credit card terminal or equipment. The touchtone system necessary to process credit card transactions is supplied by another company. There is a start-up cost and the rates are high because of the other company that’s handling the touchtone system.

Merchant accounts come in all shapes, forms, and sizes. Make sure your merchant account provider sets your business up with the correct number and type. Don’t become a victim of higher processing fees.

How to Choose the Best Merchant Account Service Provider

You have a great idea and you’re ready to start your new business. You selected the name of your business, obtained a business license, selected a great location, printed business cards and brochures, registered your domain name and built a professional website. You have your bookkeeping software, plans for customer relationship management and opened your business bank account. Now it’s time to obtain a merchant account and ACH service so you can accept all major credit cards and electronic check payments.

If you registered your business you probably started receiving postcards advertising various merchant account service providers. I’m sure all of their postcards give the impression that they provide excellent service and have extremely low rates. So how do you choose the best merchant account service provider for your business? How do you know which merchant account provider is reputable and which one is questionable?

Choosing a provider to process your credit card and electronic check payments is one of the most important decisions you will make as a business owner. Choose the wrong provider and you will pay high rates and fees, potentially receive low quality service and be stuck with a payment solution that does not meet your business requirements. Choose the right provider and you will obtain a competitive advantage.

Accepting all major credit cards and electronic check payments for your retail, restaurant, Internet, Mobile or Mail Order/Telephone Order business is the lifeline of your business. If you don’t have access to your capital you will quickly be out of business. SaleManager has a 10 Step Checklist for Selecting the Best Merchant Account Service Provider.

Choosing a Merchant Services Provider Checklist

1. Never choose a Merchant Account Provider with an Early Termination Fee. This fee is used to “lock-in” a merchant. If you agree to an early termination fee you must pay the processor to close your account even if they provide horrible payment processing, low quality customer service and inadequate technical support.
2. Never choose a Merchant Account Provider with an Application Fee and Setup Fee. This is a junk fee that is simply a revenue stream for the provider.
3. Never choose a Merchant Account Provider with an Installation fee or Programming Fee. This is another junk fee.
4. Beware of Annual Fees and Monthly Minimum Fees.
5. Ensure your payment solution is PCI Compliant. Your merchant account provider should be able to provide you with written verification that their solution is on the MasterCard and Visa official PCI Compliance List.
6. Beware of hidden fees. Your merchant account provider should disclose all fees in writing. If you don’t agree to an early termination fee you can close your account if you discover hidden fees at a later date.
7. Perform a Better Business Bureau search before you sign an agreement. If you find a long list of complaints simply walk away from the provider.
8. Choose a provider that has been in business for at least 10 years. You should ensure your processor will be around when you need them.
9. Ensure your merchant account provider can provide professional customer service.
10. Ensure your merchant account provider can provide professional technical support.

Once you have completed your upfront research you should request a price quote from at least three providers. If you plan to process online request a payment gateway test account so you can ensure their solution meets your requirements. If you’re interested in a retail or restaurant payment solution be sure to get a written price quote listing all fees and hardware costs. Never sign a lease for credit card processing hardware. That is a bad deal for the merchant but a great deal for the merchant service provider. If you ever leased a car you know about all of the “extra” fees at the end of the lease. Again, never sign an equipment lease unless you have no other option to obtain the credit card processing equipment.

Finally, when searching for a low cost payment solution you can use your favorite search engine to lookup the following low cost payment solutions. These payment solutions meet the 10 criteria listed above for selecting a reliable, secure and low cost payment solution:

• Retail & Restaurant Payment Solutions- Google: Openbravo POS Payment Gateways, RetailPayments VPOS, SaleManager POS
• Internet Payment Solutions- Google: Planetauthorize
• Mobile Payment Solutions- Google: free iphone payment application, free blackberry payment application, free windows mobile payment application, free android payment application
• CRM Payments- Google: SugarCRM Payment Module, vtiger CRM Payment Module, Salesforce Payment Module