Credit card processing options for an ever-changing market


Business owners and managers have more choices than ever before when it comes to merchant accounts and credit card processing. In response to industry competition, providers have begun to offer different pricing structures in an attempt to carve out their own niche. Going even further, some providers aren’t actually merchant service providers at all. Instead, they work with your existing processor to lower rates and fees.Most business people find the topic of credit card processing confusing enough without interjecting even more options. However, the new choices hitting the marketplace are a good thing because they’re helping to lower processing costs for businesses that are diligent enough to weigh their options. This article will help you to learn about and consider the different options available.Tiered Merchant AccountsTiered merchant account pricing is the traditional structure that has been the standard since the dawn of credit card processing. Tiered pricing generally operates by grouping the couple hundred or more interchange fees dictated by Visa and MasterCard into just a few rate categories. These categories are typically referred to as qualified, mid-qualified and non-qualified.Providers have control over how interchange fees are categorized allowing them a sort of invisible control over the actual cost to the merchant. An industry professional once said to me that “tiered merchant accounts are the biggest joke going.” Needless to say, tiered pricing is often the most expensive way to accept credit cards.Interchange Plus Merchant AccountsInterchange plus pricing is the most transparent merchant account price structure. Interchange plus accounts function by applying a standard mark-up to the actual fees dictated by Visa and MasterCard for any given transaction. Unlike tiered pricing, interchange plus ensure that the merchant is always charged the same mark-up and that the mark-up is not inflated by the provider.Flat rate merchant accountsThe newest option for processing credit cards is the so-called flat rate merchant account. Flat rate pricing functions similar to interchange in that the provider passes along the actual charges as determined by Visa and MasterCard. The difference is that they charge a flat monthly service fee to maintain the account instead of adding a percentage mark-up to the actual interchange fee.Flat rate pricing may be a good option depending of course on the amount of the monthly service charge. For low-risk, card-present businesses like retail stores that have traditionally lower interchange fees, a flat rate account may cost more than say an interchange plus arrangement.Merchant account consultantsThe last credit card processing option is offered by companies that don’t actually provide merchant accounts. Instead, they work with your existing merchant account provider to lower rates, fees and total processing expenses.These companies don’t charge any out-of-pocket or up-front fees for their services. Instead, they make their money by charging the merchants whom they help a percentage of the savings that they were able to secure. Essentially, merchant don’t pay anything until they’ve already saved money – and the charge is guaranteed to be less than the savings.There are a lot of companies out there touting themselves as consultants who are really standard merchant service providers. If you would like a consultation by a consultant you can click over to MerchantCouncil and send a contact request. If you decide to search for such a company online, be sure that you’re getting a true consultant and not just another merchant account provider.

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This article about credit card processing options and more information such as merchant account reviews is available at MerchantCouncil.
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