For many businesses, merchant account fees are responsible for a significant portion of monthly operating expenses. To be sure that you're paying as little as possible for credit card processing, it's a good idea to periodically check the market by getting merchant account quotes from a few different providers.
A very efficient way to do this is to use an online merchant account quoting service. These services perform basically the same function by delivering quotes from multiple providers, but they do it to varying degrees.
In the following article, I'll examine a few different quoting services and talk about the pros and cons of each. We'll also cover the aspects of a good merchant account quote and what you can do to ensure that the rates you're quoted are the rates that you get - nothing more, nothing less.
The background on merchant account quotes
In the sales industry the term "lead" is used to refer to information about a prospective buyer. A lead usually includes contact information or some other form of identifiable information for a business or individual that is known to be in the market for a particular product or service.
Online services that offer merchant account quotes collect information from people and businesses looking for credit card processing and they sell it to merchant service providers. For most quoting services this is as far as their involvement goes, but as I'll explain in the next section, one newcomer to the market has taken things a bit further.
Where to get quotes and what to expect At the time of this writing, merchant account quote web sites operate using one of two business models to shape their service offering. Each type of service has its pros and cons - it's up to you to decide which type best fits your needs.
The Middleman The first and most traditional type of quoting service is what I like to call "middleman." Middleman quote services collect information from online forms via one or a large network of web sites. Once a prospective buyer submits their information, it's quickly passed to a provider - often in a matter of minutes. Once the provider receives the lead, they contact the buyer and attempt to sell them a merchant account.
There's not much more to say about middleman merchant account quote services because their involvement ends as soon they send information to the provider.
Middleman services typically distribute each lead to between three and five providers. Competition is very fierce among providers and you should be prepared to field a barrage of telephone calls, emails, faxes and even mail in a short period of time. The merchant account offers will come quickly, often delivered with high-pressure sales tactics. With a middleman service, providers won't always send an actual merchant account quote right away. Instead, they'll try and sell you something right away.
The best thing to do when using a middleman service is to get an actual written merchant account quote from each provider and then step back for a moment to analyze each offer. If you have questions about a quote, contact the provider for clarification. To get the best rates and fees, don't take a quote at face value. Instead, use the fierce competition to your advantage and ask providers beat their competitor's quote.
I regret to say that I couldn't get permission from any middleman quote services to mention their name in this article, but a slew of them can be found by typing the term "merchant account quote" into your favorite search engine.
The Consultant The second and more in-depth type of merchant account quote service is what I call the "consultant." Consultant quoting services take ownership of the quote process from start to finish by providing an online venue where customers and providers meet. Consultant services collect information via a series of forms on a single (their own) web site when a prospective buyer (you) creates an account. This information is then displayed anonymously to providers. After reviewing a buyer's information, a provider can choose to place a quote or wait for a customer that's a better fit for their service offering.
Once a provider places a quote for a buyer, a consultant quote service offers support to both the buyer and the provider to assist in the selling process. They essentially act as a neutral third party to answer questions, provide mediation, record quotes and communications, and offer general assistance. Consultant quote services produce a low-pressure sales environment because the buyer's contact information is not given to a provider until after they accept a winning quote.
CardFellow.com is a great example of a consultant merchant account quote service. You can visit their web site to read more about their services.
The aspects of a good merchant account quote There's a lot more to a good merchant account quote than low rates and fees. A good quote is thorough, and specifically formulated for your business's needs. Regardless of which type of quoting service you decide to use to get quotes, chances are good that you'll need to do a little haggling to get rates and fees where you want them.
Quotes need to be specific to your business's needs. A provider shouldn't offer you a quote until they've learned about your business and your processing needs.
Middleman: You'll need to speak with a provider to give them this information.
Consultant: The provider can review your business profile without needing to speak with you.
Quotes must be all-encompassing and thorough. Merchant account quotes should encompass every rate and fee that you'll be obligated to pay. Quotes that just focus on prominent rates and fees like the qualified discount percentage and the transaction fee are incomplete.
Middleman: You'll have to be sure that you're getting all of the rates and fees in writing by asking the provider.
Consultant: They record quotes for you and they require provider's to disclose all rates and fees. Provider's can't submit quotes unless all rates and fees are provided.
Get everything in writing. The merchant account quoting process is often involved, requiring quote revisions and haggling. Be sure to get all changes and promises in writing from the provider so there's something to reference later if a misunderstanding should arise.
Middleman: You'll have to be sure to record conversations and information between yourself and providers. A good way to do this is to insist on communicating via email. That way, there's a chronological communication trail to reference later.
Consultant: They provide a private message board unique to each quote for you to use to communicate with providers. This automatically creates a communication log that's verifiable by a third-party (the quoting service).