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Another Merchant Account Fee Explained

Understanding merchant account fees can get real confusing, real fast.  One fee that trips up lots of business owners accepting credit cards for the first time is the “monthly minimum” fee.

Let’s face it, how can you compare merchant accounts if you don’t really understand how the fees work?

To help clarify things, I put together a short audio and 3 examples that should help make sense of things for you.

Note:  You can download a copy of the audio transcript by following the LINK.

For all examples I’m going to simplify things by using only 1 process rate to demonstrate how the minimum processing fee works…

Example 1:  Let’s say you have a $25 monthly minimum processing fee.  If for a given month your processing fee was 1.72% (for retail) and your processed $1650 in transactions, your processing fee would be: $28.38.

Your monthly minimum would NOT come into effect, because your ACTUAL processing fee was MORE than the monthly minimum.

Example 2:  In this example let’s assume your monthly minimum fee is $20.  Your processing fee was 1.72% (to keep things simple) and you processed $975 for the month.  Your processing fee would be $16.77.

Because your ACTUAL processing fee is LESS than the monthly minimum, the merchant account provider would add another $3.23 to your account to bring your processing fee to $20.

Example 3:  For this example, let’s work with a monthly minimum of $15.   Again, using the same 1.72% processing rate, if your monthly sales volume for Visa and/or MasterCard was $725, your processing fee would be $12.47.

Your merchant account provider would add another $2.53 to your fees to bring your processing fee to the minimum of $15.

As you can see, this is more an issue for new businesses, or businesses just beginning to accept credit cards for the first time.  And that’s because any significant sales volume will make the fee irrelevant.

Need to evaluate merchant account providers?

To Claim Your Merchant Account Review…

You can request a merchant account quote.  Simply fill out the short form and we will contact the appropriate merchant account providers for you.

Are you ready to discover how setting up a new merchant account can help you accept credit cards with little or no money out of pocket?

You can download a free report of the Merchant Account Guide.  Just follow the link to download your copy today.

Finally, you can follow the link to scan a list of merchant account providers in your area that can help you set up a new merchant account.

Comments?  Questions?  Other merchant account issue you’d like to share?

We do value your opinion, and would like to hear from you.  Kindly leave a comment for us and we’ll respond as soon as possible.

Three Case Studies

Recently we heard back from three dentists and doctors that recently completed a merchant account review completed for their practice.

And with a real slowdown in the economy, it’s no wonder why.

In fact, long before it became “fashionable” to save folks money, we have quietly helped business owners save real money on their credit card processing fees by requesting a merchant account quote.

Anyway, here are the results of what was shared with us…

Case Study #1

Dr. Schwartz

Reviewing Dr. Schwartz’s merchant statement revealed opportunities for savings.  Since he was set up for 3-Tier pricing (fairly normal for a “retail” type of business), as expected his 2nd and 3rd tier rates were much higher than “normal.”

On a side note, the 2nd and 3rd tier are technically called “mid qualified” and “non qualified” respectively.  And most companies never disclose these rates when they sign you up.

He was able to save roughly 0.5% from each rate category, resulting in an overall savings of 17.6%.

This means that, in actual dollars and cents, Dr. Schwartz saved $724.89 per year by switching to another merchant processing company.

Case Study #2

Premier Dental Care.

Kelly from Automated Merchant Processing, LLC shared with us that she reviewed the latest copy of their merchant statement.  Since Premier Dental never reviewed their account since opening their doors years ago, Kelly was confident that she would find ways to save them money.

Unlike Dr. Schwartz above, here’s what she discovered:

1. Their “face to face” rate (”discount” rate) was much higher than usual
2. Their “per transaction fee” was 27 cents (extremely high)

Across the board she was able to reduce their fees, saving them roughly 15.3% overall.   Their projected annual savings came out to $1,450.47 per year.

That’s not too shabby in my book.

Case Study #3

Dr. Cherrone

Technically Dr. Cherrone is not a dentist.  Rather, her specialty is functional medicine.  So why put her in this list?

Well, for starters her overall processing volume is approximately the same as the other two examples.  And since she has an office where patients come by for treatment, her merchant processing solution is similar to the other two case studies.

So what did Dr. Cherrone find out by requesting a quote from the website?

Believe it or not, her highest tiered rate was 4.6%.  Outrageously high.  Forget all the other rate reduction opportunities combined.  Slashing this fee made a huge difference to her bottom line.

At the end of the day, she was able to save more than 32.1% off of her current processing fees.  In total dollars and cents it means that Dr. Cherrone saved $2,377.15 per year.

So How About You?

You can request a merchant account quote.  Simply fill out the short form and we will contact the appropriate merchant account providers for you.

Are you ready to discover how setting up a new merchant account can help you accept credit cards with little or no money out of pocket?

You can download a free report of the Merchant Account Guide.  Just follow the link to download your copy today.

Finally, you can follow the link to scan a list of merchant account providers in your area that can help you set up a new merchant account.

Comments?  Questions?  Other merchant account issue you’d like to share?

We do value your opinion, and would like to hear from you.  Kindly leave a comment for us and we’ll respond as soon as possible.