When to Switch Merchant Account Providers and How by bnmbgtrtr52

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									?Businesses primarily cancel their merchant account because they no longer need to
accept credit cards or because they're switching to a different provider that has offered
them lower rates and fees. When an account is cancelled because a business no longer
needs to accept credit cards, it usually means that the business is being dissolved and
there's no reason to have an account at all. However, cancelling a merchant account to
switch to another provider that promises lower rates may be more trouble than it's
worth - literally.

Check with your existing provider before you cancel your merchant account
Competition is the driving force behind the high merchant turnover that exists in the
payment card industry. Any small business owner can attest to the high frequency at
which they're approached by a merchant account salesperson promising the best rates
and fees. With so many offers it's tough not to investigate a few, and many business
owners do just that. The problem is that they switch to the new account without
consulting their existing provider.

Merchant service providers want to retain clients. It's a lot easier for them to keep an
existing client than it is to acquire a new one. The same is true from a merchant's
point of view. It's a lot easier to have the rates and fees lowered on your existing
merchant account than it is to cancel the account and open a new one.

Don't look at the constant flow of new merchant account quotes as an annoyance,
instead, view them as a helpful reminder. Each time you're offered merchant account
rates that are lower than the rates on your existing account, send them to your
provider and request that they match or beat the better quote. Even if you're in a
contract, many merchant account providers are willing to lower rates and fees in order
to retain your business.

By giving your existing provider a chance to match quotes that you receive, you're
getting the benefit of the lower rates without the hassle of cancelling your exiting
merchant account and opening a new one.

Avoiding cancellation fees when switching merchant accounts
So what happens if your existing provider won't match or beat the rates of a
competitor? The first thing to do is determine if you're under contract, and if so, how
much the cancellation fee is to close your merchant account. Even if you're looking at
a large fee, there are a couple of things that you can do to avoid paying it entirely.

The first is to read the terms of your contract. Most cancellation fees are void if a
merchant service provider raises rates or fees within the contract period. If your rates
have increased since you originally signed the contract, or since the last time the
contact auto-renewed, you may be able to cancel your merchant account without
having to pay the fee.
If that fails, try to pass the cancellation fee along to the new provider that's trying to
earn your business. Especially if you're processing a decent amount of credit cards
each month, it may be worth it for the new provider to pay your way out of your
existing account. Believe it or not, this is something that happens on a fairly regular
basis. Most providers won't advertise that they'll pay cancellation fees to their
competitors, but they will do what they can to get your business if the numbers work
for them.

If all else fails…
If you're existing provider is unable or unwilling to meet lower rates and fees
promised by a new provider and you can't avoid the cancellation fee, make sure that
it's worth it to switch accounts. Crunch the numbers to figure out if the lower rates
and fees will save you enough to negate the out-of-pocket expense of the cancellation
fee.

Make sure the new rates are truly better
The final and perhaps most important point to cover before switching merchant
accounts, is to make sure that the rates and fees promised by a new provider are really
better than what you already have. Especially on a tiered pricing structure, merchant
account rates aren't always what they appear to be. The article, "Merchant Account
Rates: Tiered VS. Interchange-Plus Pricing" at the MerchantCouncil will help you to
get a better understanding of this topic.

This article and more merchant account information is available at
merchantcouncil.org to help you find the best merchant account for your individual
processing needs.

								
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