Businesses primarily cancel their merchant account because they no more need to accept credit cards or because they're switching to a different provider which has offered them lower rates and fees. When a merchant account is cancelled because a business no longer needs to simply accept charge cards, it usually implies that the business has been dissolved and there's no reason to have an account at all. However, cancelling a merchant account to change to another provider that promises lower rates may be more trouble than it's worth - literally.
Check with your overall provider before you cancel your merchant account Competition is the driving force behind the high merchant turnover that exists within the payment card industry. Any small business owner can attest to the high frequency at which they're approached with a merchant account salesperson promising the best rates and fees. With so many offers it's difficult not to investigate several, and many business people just do that. However , they switch to the brand new account without consulting their existing provider.
Merchant providers want to retain clients. It is a lot easier to allow them to keep a current client than it is to get a new one. The same is true from a merchant's point of view. It is a lot easier to possess the rates and fees lowered in your existing merchant account than to cancel the account and open a replacement.
Don't look at the constant flow of new merchant account quotes being an annoyance, instead, view them as a helpful reminder. Each time you're offered credit card merchant account rates which are less than the rates in your existing account, send these to your provider and ask for that they match or beat the better quote. Even if you're inside a contract, many credit card merchant account providers are willing to lower rates and costs to be able to retain your business.
By giving your overall provider a chance to match quotes that you receive, you're getting the advantage of the low rates without the headache of cancelling your exiting merchant account and opening a replacement.
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, just how much the cancellation fee would be to close your credit card merchant account. If you are looking at a sizable fee, there are a couple of things that you can do to prevent paying it entirely.
The very first is to see the relation to your contract. Most cancellation fees are void if your merchant company raises rates or fees within the contract period. If your rates have increased because you originally signed the contract, or since the last time the contact auto-renewed, you might be in a position to cancel your credit card merchant account without having to pay the charge.
In the event that fails, try to pass the cancellation fee along to the new provider that's trying to earn your business. Particularly if you're processing a decent amount of charge cards each month, it may be worth it for that new provider to pay for the right path from your existing account. Surprisingly, this is something that happens on a fairly regular basis. Most providers won't advertise that they'll pay cancellation fees for their competitors, however they is going to do what they can to obtain your business if the numbers work with them.
If all else fails� If you are existing provider is unable or unwilling to meet lower rates and costs promised by a new provider and you can't steer clear of the cancellation fee, ensure that it's worth it to switch accounts. Crunch the numbers to figure out if the lower rates and costs will save you enough to negate the out-of-pocket expense of the cancellation fee.
Make sure the new rates are really better The ultimate and maybe most significant indicate cover before switching merchant services, would be to make sure that the rates and costs promised by a new provider are really much better than what you already have. Especially on a tiered costs, credit card merchant account rates aren't always what they appear to be. The content, "Merchant Account Rates: Tiered VS. Interchange-Plus Pricing" at the MerchantCouncil will help you to get a better understanding of this topic.