Credit Card Processor - The Biggest Mistakes Made by  Business Owners

Ecommerce is an online buy and sell that deals with business through using social media sites or network. When ecommerce became popular, it was often known as expensive and complicated to setup. This was proven both by Visa/Mastercard, technology and shopping cart perspective.

Ecommerce nowadays is the most common term for online business. Ecommerce is the way for people who likes to buy and sell in social media or in internet by using different application that is suitable for ecommerce just like Amazon and Zalora.

When you engage ecommerce, it is important to have any bank accounts for the mode of payments. Similarly, banks and cards are no longer high risk which makes a great idea because it is much easier to use and to get merchant account.

If you are a business owner, it is important to know, to make a research and study about what they are getting into because some owners are tend to engaged a merchant processing agreement without knowing and understanding what they are engaging to.

Before you read further

This article, we will know about deceptive practices that is been employed by enlightening our minds to know the small number of processors in the payment business.

There are a lot of hardworking professionals who are very dedicated to their work or business that is why most people in the merchant services industry became successful and their business grew even more. My point here is, that this is in no way reflective of the industry as a whole that most established processors are willing to go for extra mile and support their clients.

The purpose of this article is to widened your minds to be more knowledgeable when choosing a processor so that you can proceed with higher self- esteem. In fact, if you are a business owner, you should always keep it in mind all the advices and information.

Importance of terms and conditions of the Merchant Agreement.

It is normal to ask for some information especially if you are not that knowledgeable enough. You speak to other sales people while researching for your credit card processor and you find it too much information. You still can’t simply make your decision and start processing your own. You need to wait for your processor to do that thing.

If you want to apply a merchant account, you need to comply first the said requirements and wait for the approval to use the service.

When doing an application paperwork, the terms and conditions is very necessary because it is where you found out that you have been agreed or disagreed about the documents. And it plays a big part of businesses and merchant agreement.

In applying a merchant documents, it is important to read and understand the terms and conditions before signing it in or before proceeding to another documents. Who would just sign a paper or contract without reading it? What If there’s an agreement there that you won’t approve but it is now too late because you already signed it. So, it is important to read before signing.

In this case, there are lot of people who don’t read the terms especially when its long because they think that it is a waste of time and they also think that they knew already what is written there. Terms and conditions are everywhere, websites, applications or any site that needs to have an agreement. If you don’t want to fall, don’t let your merchant account agreement down under this category. Because it will give a big impact to your account. There are only few people who reads a lot about merchant account agreement’s terms and conditions.

The most common cause of dissatisfaction has to do with shift pricing because of some processors who failed to explain further towards the people during the process.

Watch out for interchange downgrades and rate fluctuations (AKA hidden fees)

When choosing a processor, cost is important because it is the main factor of decision-making. Merchants are very cautious when it comes to the price, because pricing is important because it defines the value that your product’s worth.

Merchants have expectation when it comes to agreements, either they receive something or they expect even more. But the most common dissatisfaction about signing an agreement or any terms is that they didn’t get what they’ve been expecting. That is why, they said that expecting too much can upset you or disappoint you. These are the two reasons why:

The merchants are not knowledgeable enough when it comes to merchant industry pricing.

Other business owners want to be sure that they will have receive something that is why they didn’t bother to read the emailed letter or contract sent by the sales person and that can cause misleading towards sales person.

When you are a member of a merchant industry, there are different kinds of card when you process from a bank, its either a visa, Mastercard but it only depends on the holder. But some cards are very expensive in processing, what you need to do is to understand the rate that it will rise or shift. But it is very common because of the card is being used, either Visa or Mastercard.

After knowing that the cost to processor shift on depending on the cards that has been used, we can now fully understand why the cost to the merchants sometimes shift. Providing with this knowledge or information, we can now discuss the worst trick in the merchant industry that has been occurs when the sales person tells a low rate, but that can’t describe to the merchant that the pricing shift on.

For example, a sales person is giving you low discount rate. However, this does not mean that whenever you swipe your credit card, this rate will only be applied. You will never pay the given rate no matter how many times you swipe your credit card transaction.

Using your common sense, with a bit of knowledge about interchange table, you can easily avoid this problem, assuming that if you receive a pricing quote that is a fair rate, then use your common sense, how are you going to deal with this kind of problem.

There is nothing wrong with it when Visa and Mastercard has been mold this manner, it is always been explained by the sales person. Sadly, it is not always that case. When interchange rate occurs, the processor should make a way on how to increase the cost into the merchant.

If a non-qualified transaction is done, the damage occurs when unexpected charge of cost increased by the processor from Visa or Mastercard is used. Here, we can now fully understand about misleading that is being applied. Other countries, when the card is being employed, it increases the value for how many rates. There’s nothing wrong if the processor added a several surcharge for various type of card as long as the processor operate the income and services they’ve been providing. Sadly, there are still some processors who didn’t do this and that is why the reason the business owner didn’t get what they have been expected.

Let us create a simple example; A merchant receives a not enough rate from a processor, so it's pretty obvious that there is something wrong. Then a processor has a surcharge for how many quote rates and is being applied no matter what card is being used.

If you’re a merchant, it is necessary to read any documents especially the terms and conditions before signing it in. In this way, you can easily determine the problem and avoid it. You can have an information about the pricing table and cards and ask the sales person.

If a sales person is discussing pricing and didn’t mentioned any about interchange table and premium cards, it is a serious matter and serious warning call. Make sure that the sales person discussed about interchange and premium cards to be knowledgeable enough and to avoid lack of information.

There are a lot of benefits that we can gain by reading and understanding the merchant agreement, because through this, we can easily fully understand what interchange is. Call center staff is not an applicable to generate any businesses or merchants because they work from a script, yes, they trained how to communicate and assist the business owners but they are not that suitable enough to educate and give some information to the business owners.

Salesperson should be knowledgeable enough that can educate the people who are business owners about the interchange, how interchange work and they should be able to discuss with you the processing rate. Every detail about the interchange or what benefits you can get, should be clearly discussed by the salesperson.

Read, study and analyze the agreement that you are going to deal with especially the assessments, rates, downgrades and interchange from the card associations. But make sure that you fully understand the agreement before signing it in.

Be aware of the contract term and early cancellation penalties

Businesses has an agreement, contracts that has a limit of year or months between business owners and processor and that is called, contract term. That would be the proof that you both agreed the terms and even though you want to back out, you can’t do it anymore because you already signed and agreed the contract.

In this article, we will know the reason why there is so called contract, one of those reason is cost. If you want to open a merchant account, it involves amount of work and expense for the processor. For the processor, in order to complete a KYC be sure that you know your customer and other stuffs to avoid problems like fraud. Throughout the process including important matters, it will really cost a lot of work and expense. Today is different, the merchant will now be the one to process the requirements before the processor generate positive revenue from the account. And this is the reason why contract term exists.

By the understanding about agreement, about contract term, there is always a penalty for early cancellation of contract. For example, if you signed a contract term that is good for 2 years, and cancel after 1 year, it means you now have 12months remaining on your agreement.

Early cancellation of contract term should be important to start-up a business but we should always remember that in starting up a business, not all business will be successful. In some cases, other business owner shut the doors of their business because it isn’t working out. That is why cancellation of fees should be well discussed by a salesperson before doing an agreement or contract signing. The processor will understand your concern and will work with you no matter what.

Are you making volume commitments?

When processing an agreement, the volume commitments must satisfy the merchants. The merchant must contain a big amount of money per month for the process. This situation is not reliable because it is very unfair from the others who just starting up a small size of businesses. Problems will occur and applied if the merchant is not satisfied with the volume commitments, so make sure that the contract you’re signing in has no volume commitments.

In some cases, volume commitments are also a fair fee. Why? Because of the pricing tricks that have been originated in the industry. Also, there is a rule that applied and it should be followed strictly because rules are rules and it matters a lot. To prevent this situation which you don’t want to happened, you should be aware of that clause.

The volume commitments here in this article does not mean to be confusing with the monthly fee. This is to help the processor and to understand the cover cost of inactive accounts. This monthly minimum was disclosed because of it is standard and fair.

Use the competition to your advantage

There are clients that wants to ask some information and details, some advice, about interchange, on how interchange work and what it is all about. As a processor, you need to be careful to your advices and you need to discuss the information well in order for the clients to cope with the information and also to avoid misinformation. Strategies and techniques are also important because even you can’t discuss about interchange, as long as you have techniques and strategies, because it is an alternative way of providing information towards the clients.


We all know that when choosing a processor, it cost a lot of hard work. But let us not forgot that we should not be ashamed and intimidated when choosing and approaching a processor because they are the one who will guide us and help us in processing a merchant account. And most of them are hardworking and dedicated to their work.

Always bear in mind that processor will help you process your accounts because they want you to succeed, they support you and they will make you believe that you can do everything. Also, processor will make money in every sale you process so not just you who can benefit but also the processors, you are also helping them to succeed.

Problems, concerns or any situation that make you confused should be discussed with the processor so that they can help you and answer your concerns. If you have anything to ask, don’t hesitate to approach them and ask them. But, make sure that they raised your concern and that you can feel satisfied with their knowledge that shared with you.

If you feel you are now knowledgeable enough because they educated and informed you well about everything that you’ve been looking and asking for, then apply that knowledge in starting up a business or in processing any accounts. Every merchant should face and works one on one with the same account manager for their account. This ecommerce transactions can make your business easier and reliable. If you want more information, you can visit in different website that is about ecommerce industry.