Formpay
04-16-2008, 01:30 PM
Note: I obviously wrote this in a hurry and havnt grammar or spell checked it. i will do this later when i have time as i wrote it on lunch break. please dont tell me i missed a period, mispelled something etc, im sure i have and will review it later
Ok i use to work in the industry with about 6 different big name merchant services company's.
Im no longer with any of them as i have started my own unrelated business so im going to give you some unbiased tips and info you may want to know before you signup.
Im going to break this into two types 1 for retail (brick and mortar) merchants and 1 for ecommerce (internet) merchants.
Since 90% of the people here only do e-commerce i will go over that first.
Ecommerce:
When looking for an ecommerce solution, the first thing you will want to look at is your shopping cart solution. Not every cart accepts every gateway. most if not all accept authorize.net or linkpoint but there are some big companies who use gateways such as securepay or even their own gateways which may not be supported by your cart.
Pricing:
This will all depend on your average ticket along with your total monthly sales. If you process under $15,000 you should expect to pay the fallowing:
Transaction Fee: 25 cents
Batch fee 35 cents
Monthly minimum $25
Statement fee: $10-$15
Chargeback fee: $25
Transaction rates:
Qual 2.10%
Mid 2.25%
Non 3.75-4.0%
Early termination fee $150 (see below on getting this waived)
Authorize.net setup $0 (DO NOT Pay this! alot will charge around $80)
Setup/application fee: NEVER PAY THIS
If you process more than 15k, call the company and request the fallowing:
Waived statement fee, Lowered chargeback fee to $20, Lowered non and mid qual rates. waived early termination fee.
Want better pricing from a company? Dont go with the company go with an ISO. An iso is an independent sales organization/ officer or whatever that company may call them. These people have the authority to lower and adjust your rates lower than the sales associates who are employed by the actual merchant services company. ISO work 100% on commission so they will do more for you to get you to sign. Even if you process less than 15k per month, an iso will give you better rates than advertised and can eliminate monthly minimum, statement fees and early termination fees. If a company ever charges for authorize.net, go though and iso and he/she will most likely waive this fee.
Having a hard time getting approved due to bad credit?
Change your total monthly sales expectation to less than $10,000. Most of the time, a merchant company will auto-approve those with bad credit as long as they process less than 10k per month. I use to work for one company that would approve anyone regardless of credit if they processed less than 10k. If you are processing more than that. consider signing up for multiple accounts with multiple companies.
Getting approved quickly:
When the merchant company approves your website they are looking for a few things, not having them will greatly delay your approval please have all of the fallowing listed clearly on your website:
1 - You address and phone number as listed on your merchant account
2 - Your refund policy (if you don't have one thats fine just make sure you state no refunds)
3 - SSL Certificate. (you must have one except in certain situations)
4 - Some sort of terms of service
5 - Your cancellation policy if you run a subscription website of some type such as web-hosting.
Retail or brick and mortar merchants:
Whats nice about this is you can pretty much go with anyone and it is easier to get approved. their is no compatibility issues with any retail merchant account
Pricing:
This will all depend on your average ticket along with your total monthly sales. If you process under $15,000 you should expect to pay the fallowing:
Transaction Fee: 20 cents
Batch fee 35 cents
Monthly minimum $25
Statement fee: $10-$15
Chargeback fee: $25
Transaction rates:
Qual 1.55%
Mid 1.85%
Non 3.75-4.0% (you will probably never get one of these with a retail account)
Early termination fee $150 (see below on getting this waived)
Equipment: Free/ $20 per month / $300 purchase (see below)
Setup/application fee: NEVER PAY THIS
One of the major money makers for merchant companies on retail accounts is the merchant equipment sales or lease. YOU NEED TO READ CAREFULLY BETWEEN THE LINES!
Free equipment -
Do not think you will save money because a company is giving away a free $800 terminal.. they are not. They more than likely have raised rates in other areas to cover this, it usually cost you more in the long run. When people see that thay can get a $800 terminal absolutely free, they jump on it and dont carefully read what they are paying. A lot of times companies will raise transactions fees a few percent, raise the monthly statement fee a couple of dollars, have increased batch and chargeback fees. Most of the time you will end up paying a lot more over a 2 year period that most merchant contracts are. also most companies that give expensive equipment away free have an extended 5 year contract and a hefty termination fee.
Leased equipment -
Paying $40 per month instead of $800 upfront might sound like a good idea, but you are really losing a lot of money by leasing equipment. I would only recommend leasing if you are in a crunch for money. Lets consider this, you pay $40 a month for a terminal that cost around $800, after you 2 year contract is up, you have paid $960 and you don't keep the terminal! A lot of people think lease means loan. it does not, that terminal is not yours.
Purchasing equipment -
This is the best way to go. you will always save money in the long run and you own the terminal and can sell it when you want to upgrade, close up shop, etc. What a lot of people dont know is terminals are universal. I would not recommend going through your merchant company to purchase one, Look on ebay or craigslist for a used one. Just the other day i found a $1400 wireless terminal going for $350 on craigslist here in tampa.
Ok i use to work in the industry with about 6 different big name merchant services company's.
Im no longer with any of them as i have started my own unrelated business so im going to give you some unbiased tips and info you may want to know before you signup.
Im going to break this into two types 1 for retail (brick and mortar) merchants and 1 for ecommerce (internet) merchants.
Since 90% of the people here only do e-commerce i will go over that first.
Ecommerce:
When looking for an ecommerce solution, the first thing you will want to look at is your shopping cart solution. Not every cart accepts every gateway. most if not all accept authorize.net or linkpoint but there are some big companies who use gateways such as securepay or even their own gateways which may not be supported by your cart.
Pricing:
This will all depend on your average ticket along with your total monthly sales. If you process under $15,000 you should expect to pay the fallowing:
Transaction Fee: 25 cents
Batch fee 35 cents
Monthly minimum $25
Statement fee: $10-$15
Chargeback fee: $25
Transaction rates:
Qual 2.10%
Mid 2.25%
Non 3.75-4.0%
Early termination fee $150 (see below on getting this waived)
Authorize.net setup $0 (DO NOT Pay this! alot will charge around $80)
Setup/application fee: NEVER PAY THIS
If you process more than 15k, call the company and request the fallowing:
Waived statement fee, Lowered chargeback fee to $20, Lowered non and mid qual rates. waived early termination fee.
Want better pricing from a company? Dont go with the company go with an ISO. An iso is an independent sales organization/ officer or whatever that company may call them. These people have the authority to lower and adjust your rates lower than the sales associates who are employed by the actual merchant services company. ISO work 100% on commission so they will do more for you to get you to sign. Even if you process less than 15k per month, an iso will give you better rates than advertised and can eliminate monthly minimum, statement fees and early termination fees. If a company ever charges for authorize.net, go though and iso and he/she will most likely waive this fee.
Having a hard time getting approved due to bad credit?
Change your total monthly sales expectation to less than $10,000. Most of the time, a merchant company will auto-approve those with bad credit as long as they process less than 10k per month. I use to work for one company that would approve anyone regardless of credit if they processed less than 10k. If you are processing more than that. consider signing up for multiple accounts with multiple companies.
Getting approved quickly:
When the merchant company approves your website they are looking for a few things, not having them will greatly delay your approval please have all of the fallowing listed clearly on your website:
1 - You address and phone number as listed on your merchant account
2 - Your refund policy (if you don't have one thats fine just make sure you state no refunds)
3 - SSL Certificate. (you must have one except in certain situations)
4 - Some sort of terms of service
5 - Your cancellation policy if you run a subscription website of some type such as web-hosting.
Retail or brick and mortar merchants:
Whats nice about this is you can pretty much go with anyone and it is easier to get approved. their is no compatibility issues with any retail merchant account
Pricing:
This will all depend on your average ticket along with your total monthly sales. If you process under $15,000 you should expect to pay the fallowing:
Transaction Fee: 20 cents
Batch fee 35 cents
Monthly minimum $25
Statement fee: $10-$15
Chargeback fee: $25
Transaction rates:
Qual 1.55%
Mid 1.85%
Non 3.75-4.0% (you will probably never get one of these with a retail account)
Early termination fee $150 (see below on getting this waived)
Equipment: Free/ $20 per month / $300 purchase (see below)
Setup/application fee: NEVER PAY THIS
One of the major money makers for merchant companies on retail accounts is the merchant equipment sales or lease. YOU NEED TO READ CAREFULLY BETWEEN THE LINES!
Free equipment -
Do not think you will save money because a company is giving away a free $800 terminal.. they are not. They more than likely have raised rates in other areas to cover this, it usually cost you more in the long run. When people see that thay can get a $800 terminal absolutely free, they jump on it and dont carefully read what they are paying. A lot of times companies will raise transactions fees a few percent, raise the monthly statement fee a couple of dollars, have increased batch and chargeback fees. Most of the time you will end up paying a lot more over a 2 year period that most merchant contracts are. also most companies that give expensive equipment away free have an extended 5 year contract and a hefty termination fee.
Leased equipment -
Paying $40 per month instead of $800 upfront might sound like a good idea, but you are really losing a lot of money by leasing equipment. I would only recommend leasing if you are in a crunch for money. Lets consider this, you pay $40 a month for a terminal that cost around $800, after you 2 year contract is up, you have paid $960 and you don't keep the terminal! A lot of people think lease means loan. it does not, that terminal is not yours.
Purchasing equipment -
This is the best way to go. you will always save money in the long run and you own the terminal and can sell it when you want to upgrade, close up shop, etc. What a lot of people dont know is terminals are universal. I would not recommend going through your merchant company to purchase one, Look on ebay or craigslist for a used one. Just the other day i found a $1400 wireless terminal going for $350 on craigslist here in tampa.