Merchant Account Reviews

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  • Dharma Merchant Services Review

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    Highlights: Excellent customer support Ethical business practices and sales transparency Great for non-profit companies Interchange-plus pricing offered No early termination fee No annual fee No monthly minimum No setup fee For businesses processing at least $10K monthly Overview: Founded in 2007 by Jeff Marcous – former regional manager for Cardservice International, then SVP of Sales […]

  • Helcim Review

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    Highlights: All interchange-plus pricing (aka Cost+) Excellent customer support Truly extensive fee disclosures Fantastic educational resources Great charts demonstrating different interchange rate scenarios No termination fees No monthly minimum No setup/application fees No PCI compliance fees Overview: Despite my propensity for verbosity, I’m a numbers guy at heart. Numerical data just makes sense to me. For […]

  • Payment Depot Review

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    Overview: Since we first reviewed Payment Depot in early 2014, they have only improved. Their marketing materials have become even more accurate, transparent and useful. This is a company that seems to really be listening to concerns, making meaningful (and timely) progress and corrections – a rare trait in this industry. Representatives are open, honest […]

  • Payline Data Review

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    Overview: Payline Data has all the marks of a great payments provider. When I first visited their site, I loved seeing information about interchange-plus pricing alongside a small collection of additional services offered on an as-needed basis. The site is inviting, not at all pushy, and generally made me feel at home and confident in the […]

  • CDGcommerce Review

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    Highlights: Interchange-plus pricing offered Great customer service and support Great for eCommerce businesses Free virtual terminal/payment gateway No early termination fees No monthly minimum No account setup or application fees No PCI compliance fees Overview: We don’t give out perfect scores lightly. Only a truly exceptional provider can hope to get a five-star review, and […]

  • Durango Merchant Services Review

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    Overview: Usually, when I see a provider advertising a specialization in “high-risk” accounts, it sends up a red flag for me. Many such providers cling to the shady underbelly of the merchant market, alongside their clients who often traffic in pyramid schemes, snake oil, rigged gambling and prostitution, among other unsavory and unfair business endeavors […]

  • Braintree Payment Solutions Review

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    Overview: Is it a brain in the shape of a tree, or a tree that grows brains? I’m not entirely sure, but either way, I can tell you that Braintree is definitely smart — smart as a business, and smart for businesses that want to accept payments through websites, smartphone apps, and mobile devices. Braintree […]

  • Beanstream Internet Commerce Review

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    Overview: In fall of 2015 Beanstream was acquired by Bambora, a Swedish payments company. While it’s still too soon to say what the long-term impact of this acquisition will be, so far things are going well! Canadian merchant accounts have historically not been very competitive with US-based accounts. While the current industry trends seem to […]

  • CardFellow Review

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    CardFellow isn’t exactly a credit card processor, but I thought I’d review them anyway. CardFellow was created in 2008 by Ben Dwyer. It is a comparison shopping engine for merchant accounts. It’s a site that let’s you pit competing credit card processors against each other in a bid to win your business. The formal name […]

  • PayJunction Review

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    Overview: As a consumer, I often find myself signing receipts. And every time I do, I also find myself thinking, “It’s 2015, why am I still signing paper receipts?” No one with any sense doubts that paperless is the way of the future for all things (as much as I love paper books). Paper is […]

What is a Merchant Account?

If you want to accept card payments from your customers – and virtually every business needs to these days to remain competitive – you need access to a merchant account. “Merchant” is another word for a seller or business owner. You can think of a merchant account as a bank account that extends you, the merchant, a line of credit. This allows a merchant to receive funding for the credit transaction based on the trust that they will perform the services or deliver the goods properly, and thus the customer will not refuse to pay for the transaction based on the inadequacy of the merchant.

The point of a merchant account is to facilitate the complex interactions that need to occur between you, your customer, the credit card networks, and your payment processor every time you receive a card payment. It helps to ensure that you receive funding as quickly as possible, that the banks are protected from losses, and that buyers are protected from ripoffs and scams. With a merchant account, everyone is held accountable based on the rules of the credit card processing agreement.

You will, of course, have to pay a number of fees in order to take advantage of the credit card processing networks and banks. But it’s much easier and more secure to open a merchant account than it is to keep a book of credit accounts for all of your customers!

How to Avoid Merchant Account Scams and Ripoffs

Be skeptical of sales gimmicks – If it sounds too good to be true, it probably is. A lot of processors make claims about having the lowest rates in the industry, but how can they all have the lowest? Answer: they can’t. They will match the rate quote provided by another processor, but the contract could still include hidden fees to make up for it. When a processor claims that it will pay you $1000 if it can’t beat a competitor’s quote, rest assured it has no intention of paying up. There’s always a loophole.

Request interchange-plus pricing – The only way to make real, meaningful comparisons between rate quotes is to get an interchange-plus rate. This type of quote will tell you the markup that you are paying on top of the wholesale (or “interchange”) cost of the transactions. Since the wholesale cost will vary from transaction to transaction, this is the only way to get a clear picture of the profit margin for the processing company. Fixed rate tiered quotes that do not separate wholesale from markup reduce transparency and make it impossible to compare the rates effectively from one company to the next.

Avoid early termination fees – The most common merchant account fee that we see complaints about is the early termination fee (ETF). These fees can range from hundreds to thousands of dollars, and are often not disclosed or poorly disclosed during the sales and contract signing process. Don’t take your salesperson’s word for it, either. Verbal promises during the sale process are not legally binding. If it’s not in writing, it’s worthless. You need to review your contract carefully and make sure an early termination fee waiver is included if the contract mentions an early termination fee.

Don’t give in to pressure – Some merchant account sales agents will try to put pressure on you to make a quick decision, saying that an offer is only good for a certain amount of time. Never let these high-pressure sales tactics sway you. You, the business owner, have all the power. Don’t make any hasty decisions. Sales agents may also try to make you feel like you owe them something just because they have spent time on you. You don’t owe the sales agent anything! Don’t let them guilt you into making a decision that could negatively impact your business for years to come just so they can close a sale.

What Is a Payment Gateway?

A payment gateway provides the connection between an online payment and the bank that processes any given credit card transaction. Whether used for eCommerce or a mobile payment application, the payment gateway works behind the scenes to securely transfer sensitive credit card information. It’s important to recognize that a gateway is not the same thing as merchant account, and each comes with its own separate fees.

Most eCommerce businesses will need a payment gateway, but some in-person businesses might need one too. Point of sale (POS) software will sometimes require a payment gateway to operate. If you just need a virtual terminal to key-in card information at your computer, however, you might not need a dedicated gateway at all. Many payment processors include a virtual terminal for free as part of their basic service packages.

To use a payment gateway, you will have to “integrate” it with your website or software. This can be as easy as typing in a numerical key. It can also be difficult enough that you will have to hire a web developer to help out. It all depends on your gateway, your software, and your needs. Your gateway provider’s website should include detailed instructions regarding integration.

When picking a payment gateway, it’s important to make sure that it’s compatible with your POS, your shopping cart, or your payment processor. Not all gateways work with all systems. Be sure to talk to customer service before you commit to any solution to avoid fees and penalties for cancelling.

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