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Businesses primarily cancel their merchant account simply because they no more need to accept charge cards or since they are switching to a different provider which has offered them lower rates and fees. When an account is cancelled because a business no longer needs to simply accept charge cards, it usually means that the company is being dissolved and there's no reason to have an account at all. However, cancelling a merchant account to switch to another provider that promises lower rates may be more trouble than it's worth - literally.
Seek advice from your overall provider before you decide to cancel your merchant account Levels of competition are the driving force behind our prime merchant turnover that exists within the payment card industry. Any small business owner can attest to the high frequency at which they're approached with a merchant account salesperson promising the best rates and fees. Because of so many offers it's tough not to investigate a few, and lots of business owners do just that. The problem is that they change to the new account without consulting their existing provider.
Merchant service providers wish to retain clients. It is a lot easier to allow them to keep an existing client than it is to get a brand new one. This is also true from the merchant's perspective. It is a lot easier to have the rates and fees lowered on your existing merchant account than it is to cancel the account and open a replacement.
Don't consider the constant flow of new credit card merchant account quotes being an annoyance, instead, view them as a helpful reminder. Each time you're offered merchant account rates which are lower than the rates in your existing account, send these to your provider and ask for they match or beat the better quote. If you are in a contract, many merchant account providers are prepared to lower rates and fees in order to retain your business.
By providing your existing provider a chance to match quotes you get, you're getting the benefit of the lower rates without the headache of cancelling your exiting merchant account and opening a new one.
Avoiding cancellation fees when switching merchant services What exactly happens if your existing provider won't match or beat the rates of the competitor? One thing to do is determine if you're under contract, therefore, how much the cancellation fee would be to close your merchant account. Even if you're looking at a large fee, there are a few things that can be done to avoid paying it entirely.
The first is to see the relation to your contract. Most cancellation fees are void if your merchant company raises rates or fees inside the contract period. In case your rates have increased since you originally signed anything, or because the last time the contact auto-renewed, you might be in a position to cancel your merchant account without the fee.
In the event that fails, try to pass the cancellation fee along to the new provider that's attempting to earn your business. Especially if you're processing a respectable amount of credit cards every month, it might be worthwhile for the new provider to pay for your way from your existing account. Believe it or not, this really is something that happens on the fairly consistent basis. Most providers won't advertise that they'll pay cancellation fees to their competitors, but they will do the things they can to get your business when the numbers work with them.
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If all else fails� If you're existing provider is unable or hesitant to meet lower rates and costs promised by a new provider and you can't steer clear of the cancellation fee, ensure that it's worth it to switch accounts. Crunch the numbers to determine if the lower rates and fees will save you enough to negate the out-of-pocket cost of the cancellation fee.
Ensure the new rates are really better The ultimate and maybe most important indicate cover before switching merchant services, is to make sure that the rates and fees promised by a new provider are actually much better than that which you curently have. Especially on a tiered pricing structure, credit card merchant account rates aren't always what they seem to be. The content, "Merchant Account Rates: Tiered VS. Interchange-Plus Pricing" in the MerchantCouncil will help you to obtain a better understanding of this topic.
