Merchant Account Contracts: What Business Owners Need To Know

If you want to accept credit cards, you’ll need a merchant account. When you apply for one, the provider does some due diligence on you and your business. This is performed in order to assess the nature of risk related to your business. When that process is completed, you’re offered rates based on their findings, and given a contract to sign. That contract is extremely important to the future of your business. This guide will show you how to read it, and what to look for.

How to Read the Contract

It’s tempting to think you need to read an Internet merchant account the way a lawyer reads every document. That’s helpful, but not really necessary. Instead, try to look for certain red flags that will give you an idea of the potential downsides to the deal you’re about to make.

Red flags include junk fees, such as annual fees or monthly minimums. Watch out for volume discounts as well. They sound like a great idea, but you can be charged more for missing those quotas. If you’re a new business, these attractive rates form the perfect trap.

Also look for the contract term. You’re signing a contract, and those tend to come with a length of time in which you’re required to use those services. If you terminate that contract early, even if you feel you’re justified in doing so, you could be charged additional money.

Terms aren’t necessarily a bad thing, because they often cover the costs of setting up a merchant account. Small business credit card processing is a complex process, and would be costly to do for a month or two before losing a customer. Terms are like an assurance that the provider will have the opportunity to make those costs back and turn a profit. Payment Solutions Inc. offers mobile and in-store payment solutions for businesses of all sizes. Whether you’re high risk, or a well-established business, can offer competitive rates.