Many merchants believe that since they are a customer of a particular bank that they will get better rates from the bank. This thinking is the furthest from the truth. In fact, the bank charges an astronomical amount in fees. The bank rate for processing may seem competitive for the merchant, however monthly statement fees, annual assessments, charge backs, termination fees, annual assessments and many other hidden fees are extremely high, making the effective rate for all the charges to be expensive. Bank of America has an annual assessment of $150 per year for certain merchants. This is ludicrous! Most credit card processing companies offer a $25 - $75 fee annual fee. Wells Fargo charges $40 per month for statement fee versus credit card processing companies fee of $5 - $25 per month. The average for smaller boutique processors being roughly $9.99.
To boot, many banks also put merchants into a 3 year contract and to terminate is very costly. Its amazing, how in a time when the industry is doing away with credit card processing contracts, banks are still able to get merchants into one. Why? Once again, because the merchant isn't aware and because the merchant fully trusts the bank.
In conclusion, ask pertinent questions, such as:
1. Are their any additional charges?
2. What is the annual contract / annual assessment fee?
3. What is the cost for a charge back?
4. How much is the per transaction fees?
5. Is there a contract? How long? How much to terminate?
Ask to see these fees on the application, so that you don't get duped. At the end of the day it is your responsibility to know what your getting into.
At Merchant Discount Rate, it is our primary goal to be transparent with our customers. We outline all the fees associated with our merchant services. We are in the business of building long term partnerships with our customers. If you're happy, we're happy. If you should have any questions, feel free to contact firstname.lastname@example.org or simply call 1-805-906-0150.