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Whether you choose to set up your account through Yahoo or your local bank, neither will give you very good rates. Both of those are considered "convenient" options, so they typically charge more knowing that many merchants will not seek better rates or service. You can get better rates and service by setting up your account with an independent agent, or you can contact one of the big processors yourself. Since you're an Internet business, make sure you understand the processor's fee structure. What will you be charged when a customer pays with a debit card? A credit card? A business card? Also, ask about gateway fees, item fees, monthly charges, setup charges, etc. I'd be happy to give you a quote, to answer any questions, or to help you set up an account. Click my profile for contack info. Here's the URL for an article I wrote that explains the different parties involved:
Best of luck to you!
Creek Financial Services
All that nMoncrief says is right on the money.
Going directly to your bank is probably your most expensive option since they are not processors themselves, all they do is pass the referral to a processor and bite off a referral fee. In essence, all you've accomplished is added another mouth to feed in the form of an additional unnecessary middleman, which of course is made up by higher fees charged to you. Why not work directly with processor yourself and avoid the middleman? By the way, I know this is hard to believe but it's true...there are only a hundred-something processsors (we call them "Acquirers') in the entire nation...these are the big boy banks and institutions. Your local bank is almost certainly NOT one of them. Don't confuse an Acquirer with a bank that issues consumer credit cards, this is a totally different industry from the processing "Acquirer" industry.
I have nothing against Yahoo Merchant Services in and of itself. Just be careful that you are not getting yourself locked into a proprietary situation if you are using the Yahoo merchant service with a Yahoo e-store and/or Yahoo gateway provider. Proprietary situations are ALWAYS a mistake because they lock you into the entire bundle since each element ONLY works with the other proprietary element--in other words, you are trapped with all of the providers whether you like them or now. Better to pick generic providers, being careful of course to make sure they are compatible. That way, if you don't like the front door, you can just replace the front door instead of tearing down the entire house and starting over, if you get my analogy. Anyway, I am not accusing Yahoo of proprietary practices, in fact I have no idea if they do or not. All I am saying to you is do you homework, investigate, and find out BEFORE you sign on the dotted line.
Here's an article I authored some time ago that I'm told does a pretty good job of explaining credit card processing rate structures. You might find the information interesting and useful:
If you have any questions or would like a comparative quote on several excellent internet processing programs through agents of major providers like HSBC Bank, Bank of America and so on (yes, these guys are Acquirers, not simply referrers) , feel free to contact me. Best of luck.
Merchant Services is a highly competitive industry. The provider you choose may want you in a contract. The most common mistake I see business owners making is that they don't know the length of their contract or if they have one at all. My best advice to you is plain and simple: GET IT IN WRITING! READ (and UNDERSTAND) THE FINE PRINT BEFORE YOU MAKE A DECISION.
Very very true, Chris. Not knowing the length of contracts and penalty fees for early termination (can vary from a few hundred to many thousands of dollars) is far and away the most common and harmful mistake merchants make every day.
A long term contract, especially when not openly disclosed, is often a sure sign of a 'low ball' offer...the great rate being offered is a 'starter' rate (break out the atomic microscope and you'll find the 'fine print') which will increase dramatically very soon, at which point the merchant finds he or she is locked into a dreadful long term contract. Too late!
Long contractual fees and heavy early term fees are also always a part of the many 'free equipment' deals that many merchant services vendors are hawking. Guaranteeing at least a 3 year committment is how the processors assure themselves of at least recouping their investment in boarding and programming a new merchant--I certainly hope nobody really thinks the processors are giving away many hundreds of dollars worth of equipment without strings--sorry business isn't done like that. Mind you, sometimes these kinds of free equipment deals DO make sense, depends on many factors. The point is: Know BEFORE you sign on the bottom line.
Words to live by: READ the contract, every line of it. If you can't or won't, hire an attorney to do so for you, worth every dime. Remember, it's what the contract says in writing that counts, , not what the salesperson says verbally. . There's an outfit called Pre Paid Legal Service that small businesspeople can join and get contracts reviewed (among other services) for something like $25 per month, something to consider if, like most small businesses, an on staff or retainer is out of the question.