Merchant statements are filled with acronyms and charges that are near impossible to decipher. As business becomes more and more dependent on credit card users, it becomes vital to monitor these statements and continually compare your current merchant provider with others.
I recently received a phone call from a merchant provider eager for one of my client’s business. My client has been very pleased with their current provider and didn’t feel justified to make the change. But, last year we declined all offers from prospective companies to do an analysis of our merchant account to see if they could save us money.
In anticipation of the process we all incredibly enjoy of sending three past statements for analysis to the prospective provider, I phoned the current processor to discuss the account. I admitted that companies were calling stating that fees were lowered and they could beat whatever our current processor was offering, as well as let the current processor know how pleased my client was with their service. Our current processor did its own analysis and was able to lower the rates, which resulted in a savings of $34/month on average. I was then told by the person I was talking to that if the other company came back with an offer, I could send it to them and they would see if they could do better. I then did a little homework and researched the processor who was eager to get us to change to see if there were any hidden items I did not know about. Here is what happened:
Lo and behold, the processor seeking our business did NOT provide me with their terms and conditions. Only a contract that mentioned a paragraph in their T & C. I went to their website and found their terms and conditions (they had two different ones depending on a 3-year contract, or a month-to-month) and the paragraph noted. Navigating to the terms and conditions for our situation revealed a charge for PCI compliance that was over $100 per year. This nibbled away at the savings they could offer, however, the offer they came back with still saved us $180 per year.
Recalling that the current processor would review the proposal from their competitor, I sent it off. Much to my surprise, my client’s current processor actually beat the new offer and, of course, with the current processor, there was not a PCI compliance fee.
In the end, my client recognized a savings of $41/month or $492.00 per year. So, word to the wise, when you review your telephone contracts, take a moment to review your merchant account. And, once every 18 months or so, take the time to allow a competing merchant provider do an analysis. It could turn out to be a significant cost savings to you.