You have just applied for your business license two days ago and it seems that for some mysterious reason unknown to you, the Postal Service just took on a faster than lightning service, because now you have at least ten pieces junk mail in your mailbox from “Credit Card Processing” companies. Every one of those companies guarantees to be the lowest rate company around. So you sit and read all the post cards and letters and nothing says anything about fees and rates. Now what?
First of all, if they are an online credit card processing company, they will have their web site address located somewhere on that piece of mail. Check the web site to see what they offer and how much it will wind up costing you down the road. Credit Card Processing Companies also have many merchant plans to choose from. Be sure and pick the plan for you or it could cost you more to keep your account. Some credit card processing companies have hidden fees, so be sure and ask before you decide. The rates will be the second area of concern. The rates are determined by what kind of business you have, how long you have been in business, how much you expect to profit not only from one sale but make within a year.
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Retail merchant accounts can expect to pay the lowest fee of 1.29%. Internet Online Merchants can expect to pay a higher fee at 1.89%. If you have a laptop and want to authorize a customer’s credit card while out in the field by using your wireless computer, the lowest rate you will get is also 1.89%.
You will be required to at least make a certain percentage. If your quota falls below, your rates could be affected and you could be charged more. If they consider you a “high risk” merchant because of the items you sell and their cost, they will not only charge you more in rates, they might also hold some of the money on your account before it is released. This can happen to merchants that sell computers; expensive electronics such as flat screen TV’s.
Charge backs on the account can happen at any time. If a customer was charged for an item and he says he never received it, they will take the money out of your account and charge you an enormous fee. If this happens too often, the credit card processing company will raise their rates or close your account.
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