Although some merchant account providers will advertise “low prices,” there is no such thing as “standard” merchant account rates. Even if providers did publish the major element of the pricing scheme, call the discount rate, it would be a number without much meaning. In fact, if you were to shop for a provider based on merchant account rates by themselves, you would probably end up paying too much.
This is because merchant account rates are the result of a formula with perhaps half a dozen (or more) variables. By looking only at the discount rate, you ignore a lengthy list of other cost factors like initiation and termination fees, equipment leases, monthly minimums, statement fees, chargeback debits and other direct and indirect costs. And the costs that are codified into the merchant account rates are then applied according to your business size, the industry you are in, the way you make sales and various other considerations.
This means there is no single figure that can be used as a common yardstick for price comparison of merchant account rates. They are not easy to calculate, as both Visa and MasterCard use over 100 rate categories depending on the type of card, where it is used, whether or not the cardholder data is correct, etc. Processors then use this information to make various categories with “averaged rates” called “qualified,” “mid-qualified” and “non-qualified” levels. The less qualified a transaction, based on any combination of the foregoing, the higher the charge will be.
When you are deciding among various potential merchant accounts, no advertising claim about merchant account rates should be seen as any kind of deal “maker” or “breaker.” Instead, of course, you will want to factor in all possible fees and “crunch” those numbers along with a few different sets of figures estimating sales volume, costs of doing business, possible chargebacks and so on. Few reputable account providers will actually guarantee the “lowest” merchant account rates in writing, and any that would do so will probably offset any “savings” with a number of special fees tucked away in the “fine print.”
Marketing efforts for quality merchant accounts will never be based on promises of low merchant account rates, or any other pricing gimmick that could be considered confusing or deceptive. Any company that does guarantee the lowest overall account rate, or lowest total cost, should certainly put it in writing, and will do so if it is on the up and up. A leading company’s customer service staff will be able to advise you on all rates and fees, and also show you how to make your merchant account as efficient, effective and profitable as possible, according to your business's own, unique circumstances.