Avoid Pricing Pitfalls!
What to watch out for...
Choosing a merchant service provider can be a daunting task - but there are a few easy questions that can help
you make a wise desicion, before you're locked into a long-term agreement.
1. Is there an Early-Termination Fee?
This is big!
Many providers will charge very high early-termination fees, typically at least $295 and above. It's important to know, because if you're locked into a 3 year agreement, that means that your provider can raise your rates, and your only alternative would be to break your contract and pay the price. That's not a fun decision to make. By having a month-to-month contract, you keep your provider honest. Globility Link never charges early termination fees. We have a $249 account closure fee to help defray our costs but you're free to leave whenever you please.
2. Is the Pricing Model "Tiered"?
This is discussed in depth here: Tiered Pricing: Just Say No!
The big takeaway is that typically, tiered pricing models are not advantageous for merchants. That's because there's no way to ensure that your provider isn't overcharging you, and there's no incentive not to! We instead recommend asking for an interchange-plus pricing plan, as that allows for full transparency. It also gives you the capability to more accurately monitor your costs and ensure that your provider is treating you fairly.
3. Are there any Annual fees or PCI Compliance fees?
It's not uncommon for providers to board a new merchant, let them process for 6 months, and then charge an annual fee.
Make sure that your contract doesn't have any annual fees buried in the fee page.
Same goes for PCI Compliance. Everyone has to be compliant, and almost all providers charge for it, because there's a cost to administer the service. What's not OK is paying PCI Compliance fees that you weren't made aware of.
Be sure to ask your provider if you'll be assessed monthly, quarterly, or annually, and what happens if you're not compliant.
The last thing you want is to find out that you're on the hook for a $300 annual PCI Compliance fee, and since you're non-compliant, you're also getting a $34.95 monthly charge.
Read the fine print and save yourself a future headache.
4. Educate yourself!
The best thing that you can do is be knowledgeable throughout the process of selecting a provider.
Learn more by clicking through our Merchant Academy articles here: