Questions You Need to Ask About Credit Card Merchant Accounts

11th November 2009

When you start looking at the different options available with

credit card merchant accounts, you can quickly become overwhelmed - and

possibly even confused. Often, the information is so confusing and so

overwhelming that important information gets overlooked. Here are some

questions that you need to ask when you are shopping for an account:

  • Is

    Proprietary Equipment Required? Proprietary equipment or software can

    only be used with that particular processing company. While you may not

    think that this matters right now, it can matter a great deal in the

    future because if you decide to switch to a new account, you may be

    required to purchase new equipment or software. In the case of

    software, this is usually provided by the company, at no additional

    cost, but in terms of equipment, this must be purchased or leased.

  • What

    Type of Processing is allowed with the Credit Card Merchant Accounts?

    Is processing available online and at the Point of Sale? What about

    telephone orders and mail orders? Not all accounts allow for all types

    of processing, and you need to make sure that you can process credit

    cards in all of the situations where payments will be collected.

  • What

    is the hold back percentage? Different processors have different terms

    for this, but this is essentially a percentage of each sale that is

    held back by the processing company - instead of being sent directly to

    you or your bank account - to cover any potential charge backs in the

    future. You need to know what that percentage is, and how long those

    funds will be held before being released to you.

  • What are the

    fees for credit card merchant accounts? As a sales pitch is made to

    you, sales people are famous for telling you about one fee, then

    telling you about features or other information, before telling you

    about yet another fee. They essentially separate those fees out in

    their pitch so that you don't notice just how many fees there are, or

    what they are amounting to. Get a complete list of the fees that will

    be charged for the entire service, so that you can see all of the

    potential fees together, at the same time.

  • Is mobile processing

    possible? If you will ever be in a situation where you need to collect

    credit card payments without being at your place of business, you will

    need mobile processing - not all accounts will allow for this,

    especially if mobile equipment has to be used, instead of their own

    proprietary equipment. Make sure that you find out before you make your


While these are often the most overlooked questions when

shopping for Credit Card Merchant Accounts, you may have additional

questions that you want to ask. Make a written list of questions that

you have before you begin your search, and make sure that you include

these questions on your list as well. Have that list with you when you

are searching for the right account - even if that search is online.