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What deals are a payment processor offering you? They might not be telling you everything about those sweetheart deals.
The payment processing industry is very competitive. For all of our clients that have chosen to work with JLE Business Consultants we thank you for that and we hope that we have lived up to our word (and if you think so, tell your friends). There are a lot of things that some payment processors tell potential clients to get them to sign on the dotted line but turn out to be not quite true. What are some of these?
Level 3 Rates
Most merchants, especially smaller or newer ones, have Level 1 data processing. Your level is determined by the amount of information that is collected with each transaction so that there is less chance of fraud. Level 2 and then Level 3 have reduced rates. Level 3 data processing is the most secure transaction possible at this point.
Some processors will tout an inexpensive rate and may promise that every transaction will qualify at that rate. It may seem easy to capture all of the necessary information but the problem is that standard POS terminals do not support Level 3 processing. Specialized software is required which means that Level 3 is usually only open to larger corporations due to the price.
Also, even if you have a POS terminal that can handle Level 3 transaction not every transaction will qualify for the reduced interchange fee.
Lease A POS Terminal
Renting a piece of equipment for a single use project is a good idea as it makes much more sense than buying it but you can’t say that when it comes to leasing a car. When you lease something long term you will wind up paying more for it than if you had just purchased it outright.
You might not have the cash to buy a POS terminal and decide to lease one until you can purchase one. For some that could work but leasing a POS terminal long-term is not something that you should do. You may have to lease the terminal for a year or for several years and by the time that lease is up you will have bought the terminal possibly several times over.
Oh, and if this is a route that you take, these contracts can also auto-renew at the end so if you do have the money to finally buy one make sure that your processor knows and that the contract is cancelled upon its completion. You don’t want to be stuck with it for another year do you?
Debit Card Rates
The processing rates for a credit card and a debit card are different. The interchange fees for those different cards are set by the issuers so the rate that a merchant should pay should be less for a debit card right? For some it is not. Some payment processors have not differentiated between the rates and instead charge the same rate for all transactions.
One thing that every merchant should ask and verify is that these rates are different. It costs less to process a debit card payment and therefore those savings should be passed on to the merchant. There is no reason not to, so if a salesperson says otherwise, don’t fall for their excuse.
When you pick JLE Business Consultants we promise to be open with you about everything when it comes to payment processing. We are only a phone call away. Other processors may promise you better rates or something else but they may not always follow through. We will go over what your rates are so there is no surprise in the future. Honesty is the best policy and that is what you get with JLE.
