Frank Merchant owns a business
called "Widgets Are Us". It's his life work. One day,
a Credit Card Processing Salesperson enters Frank's store.
Joe Salesman declares that he can get Frank the cheapest
rates and fees in town for Frank's credit card processing.
Joe explains that it really doesn't matter what "Merchant
Account Provider" Frank goes with because they all are
pretty much the same. "As long as you shop around and
get the best rate you are in great shape."
Joe explained that any company that quoted higher than Joe
was a rip off. Frank Merchant was skeptical though. Later
Frank made a few calls and got some rates over the phone
and found out that Joe did have the best deal on both
rates and the monthly payment on the terminal Joe was
recommending. No one he talked to was able to really explain
why they were higher so Frank, who is always looking for
the best price, called Joe back and signed the paperwork.
Joe Salesman went to work setting him up
Joe brought out a terminal and printer that Frank knew
was a really good deal based on Joe's quote. The terminal
looked "refurbished" but Joe explained that all the terminals
today are refurbished but it was still state of the art.
Each day Frank "batched out" his terminal to get the money
sent to his bank account. He checked with his bank and
the money for each batch of credit card sales were taking
about three days to hit his account. Frank called Joe
about this delay. Joe told him that the 24 hours he promised
was dependent on his bank depositing the money. Joe suggested
that Frank consider another bank. Frank liked his current
bank though and decided to live with the late deposits.
Frank received his Merchant Account Statement at the end
of the month. The first thing he noticed was that the
statement reminded him of a telephone company service
bill. He couldn't understand it. The rate was on the statement
that Joe quoted him - but when he divided the total amount
taken from his bank account into his sales for the month
the percentage was higher. Much higher.
Not only that, the statement had a lot of terms and fees
that Frank had never heard of before. What's this "Representment
Fee" of $15.00? "Monthly Paper Reporting" of $10.00? "Deposit
Fees" looked like 15 cents per day? And what's this "MC
Dues and Assessments"? And what about something called
a "Non-Qual" of an extra 2.25% on some transactions? Frank
was confused so he called Joe.
Joe told him he wasn't much good at math and Frank should
call customer service. Frank called the non-toll free
number and got someone on the phone after being on hold
for twenty minutes. The person Frank talked to told him
they didn't understand the terms either. Frank asked to
speak with a Supervisor. The person told him that they
were a supervisor. Frank asked about closing his account.
The person told him this was fine but he had a two year
commitment because of the contract he had signed.
Frank decided to just live with it. About a month later
he got a call from Customer Service. They explained that
the terminal he was using was not in compliance with MasterCard
Visa's "truncation regulations". They explained that he
would need a new terminal that met the regulation. Frank
asked to speak with Joe Salesperson but Customer Service
explained that Joe was no longer with them. They heard
Joe was selling mortgage loans.
Frank called the equipment leasing company that Joe had set
him up with to lease the terminal. They told him that
the lease was non-cancelable unless Frank wanted to pay
it off by paying the aggregate of the 42 monthly payments
remaining and the "fair market value". Frank explained
that he thought this was a lot of money for a refurbished
terminal that was not in compliance with MasterCard. The
leasing company told Frank that Joe and now Frank were
being investigated for fraud because the terminal is not
supposed to be refurbished and it wasn't in compliance.
About a month later a new salesperson entered Frank's
store. Sallie InternetSpecialist explained to Frank that
he was losing a lot of sales by not selling his widgets
on the internet. Frank already had a website that generated
some calls but Frank wanted customers to order right on
Frank was skeptical about Sallie's pricing so being a
little bit computer-savvy Frank got on the internet and
shopped around. It looked like twenty thousand, five hundred,
and sixty-two companies did the same thing as Sallie.
Most of them not only looked pretty good but were much
cheaper than Sallie. So Frank, who is always looking for
a great deal, called a few. None of the salespeople he
talked to could really explain why they were any better
than any of the others so Frank went with the cheapest.
Frank liked the Salesperson, Bill JustACommodity.com,
because he explained that their pricing was less than
their cost but they made it up in "volume".
Bill JustACommodity.com explained that Frank needed a
separate Merchant Account from his storefront business.
Frank signed all new documents.
Frank's web designer helped set up a "shopping cart and
catalog" and the Merchant Account Provider ( turns out
that Bill JustACommodity.com was a "re-seller") made sure
the information was given to the web designer to set the
web site up to accept credit cards. There were some major
headaches though. It turned out that the Technical Service
Provider actually was a different company than the Merchant
Account Provider. Frank's web designer explained to Frank
that the "technical support software provider" was blaming
the "Merchant Account Provider" and vice versa. It seems
the "ETC Type" got messed up on the Merchant Account Application.
There would be extra labor fees from the web designer
to figure this out - but no problem.
Two days later Frank got excited. He was getting orders
from his internet store! In fact the first week Frank's
sales were about $5,000.00. Frank knew though that a good
number of those orders he had "keyed" in because they
had stacked up prior to going live due to the delays.
A week later Frank got a call from his banker that Frank's
business checks were bouncing. Frank asked about the $5,000.00
in deposits from his internet orders. The banker knew
nothing about it so Frank called non-toll free the Merchant
Account Provider Customer Service. After forty-two minutes
on hold he was transferred to the "Fraud Department".
Fraud explained that the money was being held up. It seems
Frank's orders were higher than his approved limit. Not
only that, but Fraud needed to call Frank's customers
to make sure they had placed the orders. No commitments
were made on when the money would be released to Frank.
Just as Frank was getting off the phone a customer called.
George BigVolumeAccount was a customer and friend of Franks
for a long time. George explained to Frank that he was
getting unknown charges on his credit card that he used
to buy from Frank online. George was mad. George had checked
into it and found out that the Internet Merchant Account
Provider that Frank had used did not even issue a real
Merchant Account. They were some kind of "third party"
and were not "PCI Compliant". Worse yet, George had found
out that a "hacker" had broken into the computer servers
at the company and stolen all the credit card numbers
on file. That's how George's credit card got into the
wrong hands. George asked Frank how he decided on what
Merchant Account Provider to use anyway. Frank explained
that they all sounded the same so he just chose the cheapest
Now YOU don't have to make a decision about a Merchant
Account Provider based on price alone. The Merchant Account
Buyer's Guide is meant to bring you up to speed quickly
on all of the issues involved so you can make the best
Please provide feedback through the contact source who
provided you the Guide. This source could possibly be
through the World Payment Services™ member who made
the guide available to you - (See "A Word about Our Membership
Community"). I have tried to condense the most important
information about Merchant Accounts. If I am wrong about
something, off base, too self serving, or totally nuts
let me know. Your feedback is appreciated more then you