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January 31st, 2012:

Beware of Merchant Services Teaser Rates

Practical Ecommerce recently wrote a good article aboutthe use of deceptive merchant services teaser rates by many merchant services providers.  The author points out that there has been a strong increase in this practice since Congress passed the Durban Amendment in 2011.

Practical Ecommerce point out some merchant services processing rates that quote as little as .39%.  The fact is those rates would be sold at a catastrophic loss to the merchant services provider if they did not immediately jack up fees once the contact closes, or offer per transaction fees of several dollars per transaction on top of the merchant processing rate.

It is important to know that all merchant providers pay the same wholesale rate as Visa, MasterCard, Discover, and American Express pass these charges onto the merchant services provider, who then marks up these wholesale charges, also called interchange, and makes a profit.  If you want to maximize your savings on merchant services processing ask for interchange plus pricing.  This will save you a nice bundle in merchant services processing fees.