Beware of Teaser Rates
When your business goes shopping for a new credit card processor, there are a few key factors that you should strongly consider, including the type of credit card processing your business needs (Retail, MO/TO, Mobile or Internet), the reputation and reliability of the processor, the level of customer support they offer, and of course... COST.
On that last point, Tailored Transactions has some advice for businesses when it comes to evaluating credit card processing rates and fees: Beware of the teaser rates!
What is a Teaser Rate?
A teaser rate is a super-low introductory discount rate whose sole purpose is to attract potential customers to a credit card processor. Teaser rates typically fall well below the going rate of other processors, and the reason for that is simple: They don’t last very long! Once a teaser rate expires — and it always does — it rises to a normal or above-normal level and locks in for the duration of your contract. The old saying “If it seems too good to be true, it probably is” definitely applies to credit card processing teaser rates.
It's important to recognize these teaser rates for what they are — a low, unsustainable rate structure designed to appeal to businesses that make their decisions based solely on price. It’s similar to a business having a sale, but even sales have an endpoint. When that point is reached, the price reverts back to its previous level (or sometimes even higher). That’s because the business can’t afford to maintain the lower pricing indefinitely — and neither can credit card processors.
As attractive as teaser rates for credit card processing may appear, look beyond the price hype for substance when choosing the right merchant services provider for your business. After all, the provider you choose will be like a partner in your business for a period of time — possibly many years — so you want to know upfront that they're a reputable company who will deal with you honestly and professionally.
When it comes to credit card processing rates, it’s important to understand that every payment processor has the same “wholesale rates” from Visa, MasterCard and Discover at their disposal. These "wholesale rates" are referred to as interchange.
When negotiating with a merchant services sales rep, always get in writing the rates and transaction fees that your business will be charged for the majority of your transactions. They should be able to provide you with this information by reviewing a recent monthly statement from your current credit card processor. If you’re new to accepting credit card payments, the rep should be able to use their experience to give you an idea of how your transactions may breakdown by card type, and calculate what your average monthly cost will be.
At Tailored Transactions, we do not use or advertise teaser rates. We setup all of our merchant accounts with Cost-Plus Pricing, which is the most transparent and cost-effective pricing model available. This is the pricing model that is used by all Fortune 500 companies and the largest national retail chains.
If you would like to receive a no-obligation Free Rate Quote on your credit card processing, Click Here to complete our online request form. We will send you a detailed rate quote within 24 hours.
Visit us online at www.TailoredTransactions.com or call us directly (888) 669.1686