How to Get the Best Deal in Merchant Services

Are merchant service reps calling all of the time claiming they can save you money, or offer best deal in merchant services even though they have never seen your pricing. How can they be sure?

Yes, most of us hate getting these telemarketing calls. However, the truth is that most if not all of these callers really can save you money.

It may not be a pretty fact, but this industry works by undercutting it’s competition. When you have a piece of equipment or a gateway that works, pays you fast and has good support, the only reason to switch comes down to price! In this case, it can be a win-win if you find a processor who you can trust. We will dig into this in a later post as it will be a big one.

How to Get the Best Deal in Merchant Services

So the question comes down to, how can you make sure you are getting the best deal and paying the lowest rate?

Start with the obvious, provide a statement for them to review.

When they ask for your statement, they look for what you are paying then drop the markup rate in order to provide savings and gain the account. It is financially in your benefit to provide such statements. Do not get me wrong, there is a large amount of shady reps out there who will offer the savings and then put in hidden fees or items in there that will eventually cost you more, you need to be on look out for those, and we will help you spot those cases.

Statement Analysis

Often I see where a statement is delivered, but the merchant chose to black out the rates and fees. This actually doesn’t help you. I love the idea, get the lowest bid, however this does not guarantee savings and causes them to often find safety nets where they can make money which will be hidden. Go for full transparency. If they are not providing enough savings, tell them that. Get the deal or find out you already have the best deal which is assuring. If you do not show them your complete statement, they will try to impress you with a super low rate and know they will have to make it up somewhere else on your account, such as per item, batch fees, or hidden items. However, if you show them the statment and make sure it is an apples-to-apples quote, they are less likely to put those hidden items or markups as they need to do a side by side comparison.


Ask for a side by side proposal so that you can compare each item. Ask what other fees might be applied that is not on this proposal. Always get it in writing. Then, look for effective rate. The effective rate is the total amount paid by the amount that you brought in. This includes all fees such as batches, pci fees, IRS, etc… Here is an example, if you are paying cost plus .50% and you add up all of your items and fees, your effective rate may be 2.9%. However, take the same scenario, they quote cost plus .25% but they have higher batch fees, monthly fees, etc… When you add them together you have an effective rate of 3.5%. Which is better?

Effective Rates

Once you are comparing effective rates, you will win. Sometimes a processor can be creative to lower the effective rate and still allow them to make a nice commission. But as long as the effective rate out of your pocket is lower than your current provider, it is time to consider a switch.

The end objective is to have the lowest effective rate, get closest to cost plus 0% pricing, and the lowest fees. Each time you switch, you get closer and closer to the best deal in merchant services

To be continued…

Up Next: Should you actually switch? Can you lower your rates with your current provider? Are there any risks to switching? Can you trust the company that is proposing you?

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