In Need of Merchant Processing? Watch Out for These Three Deceptive Practices

Let’s be real: you don’t care about merchant processing.

What I mean is that you don’t care how credit card information travels from your POS terminal to the banks and back. You don’t care about what the credit card companies are doing, or about the latest regulations they put in place – unless they directly affect you.

That’s totally understandable. You’re an entrepreneur after all, not a credit card guru. Still, I’m sure you don’t want to let merchant processors take advantage of your lack of knowledge by overcharging you…

Regardless of how little you know about the industry, it’s still your duty to secure the cheapest and leanest deal for your business possible. If you stay away from these three common pitfalls, you’ll be accepting credit cards at your place of business without overpaying to do so.


“All You Pay for Is Leasing”

What They Tell You: Your merchant processing is free! All you have to pay for is the lease on your terminal.

The Truth: At first, this sounds like a steal. No processing fees to pay? Just a lease on a small little machine? How bad can that be?

Turns out, it’s pretty costly. You could pay up to $300 a month just to station an EMV terminal inside your business. That’s $3,600 a year! At that rate, you’d be better off just committing to a standard processing plan and paying any fees associated with it.

In fact, a lot of payment processors offer terminals at discounted flat rates – or even for free. For instance, we throw in a free EMV terminal almost every time a merchant signs up for processing with us.


“We’ll Never Blindside You with Unreasonable Fees”

What They Tell You: With us, you won’t get roped into any ridiculous commitments.

The Truth: Read your contract! In fact, have your lawyer sign off on it before you sign anything.

Here’s why. Most processors will charge you an early termination fee (ETF) if you want to get out of your contract before it expires. They might initially imply this to be a flat fee — maybe something like $500 — which isn’t a high price to pay to switch processors. But some processors will charge you that flat rate and a remaining month multiplier rate. So if you want to leave your contract with 2 years (24 months) left, you might actually have to pay $500 multiplied by those remaining 24 months, which comes out to an outrageous $12,000 total!

Make sure you trust your processor, read through your contract multiple times seek legal counsel, and clarify any confusing contractual terms before you put pen to paper.

“Our Proprietary Technology Does Everything You Ask of It”

What They Tell You: For one low rate, we’ll give you access to our powerful proprietary technology — the only systems your business will ever need.

The Truth: Whether it’s a flashy new POS system or all-in-one CRM/processing hardware/software, payment processors love to flaunt their proprietary technology. It’s a smart ploy that often puts them ahead of other processors in the eyes of potential merchants.

Be careful, though. A lot of processors sell you their basic technology package, but that package might not include all the features your business needs. Instead, those features become available as expensive upsells. Want to run a loyalty program straight from your POS system? That’s an extra $10/month. What if you want to send an automated marketing campaign to your customers via email? That’s another $15/month on top of what you’re already paying.

It gets worse. Say you decide that you’d rather switch processors. Some processors will make it impossible to migrate your data (contacts, reward points, etc) over to a new POS system; this means you’ll have to input everything manually or restart your loyalty program from scratch, which won’t sit well with your existing customers.

When negotiating with payment processors, make sure they quote you at an honest price. Do your homework and find a way to back up your data in case you decide to change systems and/or providers.



There’s a silver lining in all this – we took all these concerns to heart when creating our own merchant processing programs. Our tailored programs are favorites among merchants in retail, eCommerce, B2B, and more. Click here to submit your merchant statement for free, and discover how much you stand to save with Quantum.



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