Would you buy your Merchant Services Provider a car?

Would you buy your Merchant Services Provider a car?There’s a question I like to ask business owners these days, and I’ll admit part of it is because the reactions can be entertaining.

“You might be happy with what you’ve got, but are you happy enough with your current Merchant Services Provider that you would buy them a car?”

The open minded usually laugh, and say, “No,” and the skeptical types usually try not to answer, because they think I’m trying to trick them into “yes mode,” by getting them to admit that they might have made the wrong decision in regard to whatever solution they’ve got in place.

Let’s face it, the truth is, most people hate to admit being wrong, even if recognizing a mistake and correcting it will lead to more profit. This is why I try to approach the subject of Merchant Services with a little humor. It also gives me a chance to identify the skeptical prospect and know how I need to communicate with them.

However, this question also paints a picture of one of the harsh realities of Merchant Services. To the more receptive prospects, I say, “I know it seems like a silly question, but I ask it because every 5 years, that’s pretty much what’s happening. The only difference is what kind of car you’re buying them.”

For example, let’s say you’re with one of the major Merchant Service Providers. In many cases, your bill includes things like:

  • PCI charge/fee
  • Network Access Fee
  • Terminal Maintenance Fee
  • Miscellaneous Credit Adjustment Fee

What all these fees have in common is that they are just bogus charges used to extract more money from you. Add in some mark-ups on any assessments from the credit card companies, and you could easily be spending 50-100 extra every month. If this doesn’t seem like a lot, let’s consider that even $50 per month is $600 per year. In 5 years, it’s $3000. It won’t buy you a great car, but it’ll buy a nice old jalopy. On the high end, you could be looking at an extra $6000 every five years. And that’s assuming you’re not getting hurt on your rates. Chances are, if you’re paying bogus fees, you’re rates might not be the best value, either.

On average, clients who were using my competitors were being overcharged by about the cost of one monthly statement per year. For example, a clothing store in Toronto had an average statement of $5000 a month. In the end, he was over paying by about $400 a month. So, $4800 per year, for 5 years comes to $24000. For another client, it was about $75,000 every 5 years. In his case, he was buying his Merchant Services Provider a pretty nice car. So be sure to check your statements carefully each month, and hold your providers accountable.

You can also go here for a video that with great information on how to tell whether you’re getting the best value.

If you’re in the Toronto area and would like to find out whether you are overpaying, just shoot me an email, or call me at 289-839-1905, and we’ll set up a time to go over your statement.