Any information can be placed in the sidebar to help your website visitors navigate your site.
Account Effective Rates
Most merchant service companies use 3-tier pricing with rates quoted in qualified, mid-qualified and non-qualified. Some companies may use terms such as "downgrade" or "surcharge". Other pricing plans such as interchange plus, interchange bill-back or enhanced bill-back are offered by some companies. That makes comparing rates between many merchant service companies very difficult.
The simplest and most accurate way to compare cost is to compare the Account Effective Rate. Figuring out the account effective rate is simple. If you have an existing merchant account all you need to do is divide your processing costs by your gross sales for a given month and then convert the result into a percentage.
For example, if you had $10,000 in sales and paid $350 in fees, divide the $350 by the $10,000. The result is .035 or 3.5%. So, on average, you’re paying $3.50 for every $100 processed. Once you know your account effective rate, you can shop around for a lower processing cost. Please note that, if you’re on a daily discount, make sure you add all your daily fees plus the month-end charge to come up with the total expense.
To avoid any surprises with hidden fees, business owners should reserve the right to cancel the service at any time without any cancellation fees. It must be in writing and acknowledged by the merchant service company, not by the agent. Agents sometimes promise certain items without the approval from the companies.
Remember, the freedom to take business away to another processor will guarantee lower price and better service. New merchants may use sample statements as guide to estimate Account Effective Rates