10 Key Questions to Get the Best Credit Card Processing Rates

Updated on January 8, 2022



Know the 10 Key Questions to Get the Best Credit Card Processing Rates  

❑ Agreement – Is the term month-to-month or is there a contract term?

Most payment providers require a three year agreement, however there are processors that earn your business on daily or monthly basis and only require a month-to-month agreement.


❑ Cancel Fees – Are there cancel fees if you should choose to switch or close your account?

     ETF’s or Early termination fees are quite common and one of the biggest complaints from merchants. Many agents conveniently forget to tell you about this little fact and can cost you big time so make sure you ask if there is a cancellation fee and read your agreement before signing.


❑ Interchange-plus pricing – What is the pricing model offered?

     Although processors are slowly changing their pricing model, most still charge tiered rate pricing. Why? The answer is really quite simple, there’s more profit. Make sure you’re getting the best pricing available for your credit card processing rates and fees, ask for interchange-plus pricing.


❑ Monthly Minimum  – Will you be charged this fee?

     Although the monthly minimum isn’t really a fee, it may result with your account being charged or partially charged. This is a minimum charge the processor receives for a given month. Example: If your monthly minimum is $25 and your charges don’t add up to that amount you will be charged the difference or the entire amount if you didn’t process any transactions at all. All processors are not the same and compile different totals towards this fee so it’s always best to negotiate if this charge is applied.


❑ PCI Compliance Fee – Is there a monthly or annual charge?

     Payment Card Industry (PCI) Data Security Standard (DSS) fees typically range from $99 to $180 per year and can be billed monthly or annually. Not all processors charge this fee to merchants but if they do beware of the PCI non-compliance fee, usually around $19.95 per month. This can be easily avoided by asking the provider what your responsibilities are.


❑ TIN Fee – Does the Credit Card Processor charge this fee?

     This fee is referred to as IRS Reporting Fee, IRS Regulatory Fee or Filing Fee for processors getting their 1099-K documents filed. Some providers are passing this fee to merchants and charging anywhere from $2 to $3.95 per month. The Internal Revenue Service has indicated that charging merchants for verification of tax identification numbers (TINs) is not allowed. https://www.irs.gov/pub/irs-drop/n-09-19.pdf


❑ Online Reporting – Can you view your statements online?

     This can be an important factor to avoid statement fees. While some payment providers may lump this fee in with other fees, many processors will give you this option as it saves them time and money as well.


❑ Equipment or Gateway Cost?

     Retail merchants may need to upgrade their terminal to EMV capability to avoid fines and escape liability from security breaches or accepting fraudulent credit cards. Ask if they have a free terminal placement program, POS program or if they will sell you a terminal at cost? (History on EMV) If you’re selling online, you will most likely require a gateway which can be either free or have a monthly charge. Authorize.net offers a free gateway service but you will still need a merchant account. Most credit card processors offer authorize.net or have their own version of a secure gateway.


❑ Average Ticket, High Ticket, Monthly Volume – Ask to recap on these items?

     You want to go over these important items before you start processing. This is where you can run into trouble if your averages aren’t set properly. No merchant wants to get their funds held so make sure you’re telling the processor the correct information.


❑ Customer Service/Technical Service Hours & Wait Time?

     When you need an answer to a question or have a technical issue, it’s important to know what the hours are for the perspective departments. No one likes to wait too long to receive service so ask about the wait times and if so inclined, write down their numbers and give them a quick call to verify.

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Checklist for Obtaining Merchant Services

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