Most people agree that the most confusing things about credit card acceptance are the merchant account service pricing. People get confused here because most people do not do their research to find out what a competitive price is, and instead rely on a sales rep. Since most small business owners are very busy, they will simply reach out to their bank for merchant account services. Sometimes this is the best option, but it is still smart reach out to a few other vendors and banks to make sure you are getting the best deal on your merchant account service.
Small business owners often get confused because of the many different pricing models involved with various merchant account services. While the pricing model depends on the provider, the two most commonly used methods are the tiered pricing and interchange-plus methods. When utilizing the tiered pricing model, the vendors decide the rate that each merchant qualifies for. On the other hand, interchange-plus utilizes rates that are pre-set by the credit card company.
This pricing model is much more transparent, but can still be confusing because small business owners do not understand the pricing criteria. To obtain total clarity, small business should decide which type of pricing model each merchant account service provider offers and which kind works best for their business. You should also make sure you understand the pricing structure 100% so that there are no surprises!
After you understand the process of getting an accurate quote and evaluating pricing models, you are on the right track to understanding payment acceptance!