If it looks cheaper, then is it really cheaper?

I probably get a few Business Owners a week who respond to a detailed merchant account quote that I email them w/ ‘what a great deal so and so company is offering’ without wondering “why does this deal sound so good compared to other ones?”

Transparency (as you’ll see in this example), Track Record (do they have any Happy Customers?) and Competitive Pricing (fair, not rock bottom) are the three most important things to look at when looking for Merchant Services for your business.

Here’s a great example to illustrate what Point of Sale Companies are leaving out of their quotes to appear ‘CHEAPER’.  Name is changed in this example.

“Thank you for the information.  However I am still checking other companies & so far I have found one that has lower rates than you offered for most of the fees ..

I have found :

  • Visa fees : 1.49 %
  • Monthly Statement fee :6.95 per month
  • Purchase :$849.99
  • Transaction Fee :.08 each
  • Lease fee was the same


Here was my response:

“Hi Susan, I hope that when you choose to do business with someone, that you don’t just look at price.  I always look at how someone begins a relationship w/ me and what is their track record.

Just looking at your email, I can tell that this person left out three extremely important things in order to appear “cheaper”.  You be the judge…
  1. To make a profit, if a company sells the visa & mastercard rates at 1.49% (wholesale from visa & mastercard is 1.55%-1.65%), then they have to add 1% for mid and non qualified rates.  Which is stated at 1/2% in my quote to you- 3/4% LESS on your total credit card volume per month.
  2. What this person failed to tell you is that it’s $6.95 X two statements (1 for debit and 1 for credit), which equals $13.90/month.  I quoted you $10/month- $3.90/month LESS.
  3. They quoted you 8cents/ trans and failed to mention the $10/month debit minimum they impose.  Sometimes a company has a $20/month debit minimum.  My quote has zero debit minimum- $$$ LESS.
This is how a debit min works.  you got promised 8c/trans.  $10/month debit min. means that you have to minimally do $10 for that fee alone.  so, $10 divide by 8cents equals 125 debit trans that you have to do each month in order to actually pay 8cents!  What happens if you only have 3/day and you’re open 20days/mth?  That’s 60 debit trans.  60 X 8c= $4.80  In this example you would be charged $5.20 MORE, so you’ll actually be paying 16.67cents per transaction! What is it if their debit min/mth is double?

Susan, between our two sites: CanadaCardProcessing.com and CanadaPaymentProcessing.com we have OVER 90 POSITIVE CUSTOMER REVIEWS ON OUR LEVEL OF SERVICE & PRICING and over 350 ARTICLES/POSTS on the Canadian Payment Processing Industry and how it affects Small Business Owners.”

One has to always remember that… you ALWAYS get what you pay for, so it is important to prioritize where we want the savings in our lives and where we can sacrifice quality.  When it comes to Merchant Services, this is one area of your business where you DO NOT want to go dollar store quality.  If they truly have the prices that they quoted you, and not just some introductory gimmick, then you will lose in service- every time.

Click Here For a FREE NO Obligation Merchant Account Quote!


2 Responses so far

Hi! Boy am I confused..We are opening a sub shop very soon. Called around a don’t understand anything I am being told.
One place told me $20.00 a month with no hidden fees (5 year contract) and 8 cents per transaction. Forms emailed to me and small print scary giving them permission to change things after I sign AND I DONT UNDERSTAND what is written.
Another told me $250.00 sign up fee (3 year contract), 7 cents per transaction, $7.00 a month deposit fee AND
$25.00 per month ? plus tax
They both told me also it takes 2 to 3 weeks.

Yes Dusanka, they want you to be confused. This is why we have over 350 posts on this site to help small business owners in Canada like yourself understand all this purposely made complicated industry. Call us or fill out a quote form and we`ll go through everything with you.

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