How Do I Get A Low Rate Credit Card Merchant Account?

I often get this question by many Merchants: “How do I get a low rate credit card merchant account?”

1) In order to get a low rate for your credit card merchant account your average sale amount has to be low. The higher the average sale, then the higher the risk. When fraud occurs, the criminal does not shop at a business with a low average ticket, they are going to get the ‘big ticket’ items!

The larger average sale amounts can also potentially add up to larger total business volume- faster, and with much fewer transactions to get there. Which usually is a good thing, but not in employee or customer credit card fraud situations.

2) In order to get a low rate for your credit card merchant account your sales volume has to be high. A credit card processor would rather have a few larger volume accounts, then a dozen small volume accounts. As a business grows, learns more about and services their customers better, the more stable and profitable it will become.

3) More businesses go out of business in their first year than in any other time. Merchant accounts that go into default are not what the credit card processors want. They want to make money on the long term. This is why new businesses don’t get a fair shake- high risk.

4) In order to get a low rate for your credit card merchant account your business model has to be ‘less risky’. What does that mean?

Face to face with your retail customers is best. Phone orders and taking orders by invoice from customers, and then punching in (‘keying-in’) credit card transactions later at the office mean ‘more risk’.

Being completely online is risky in the eyes of the credit card processors also.   Cyber fraud is as rampant as the growth of e-commerce.

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