10 Maintaining the Best Merchant Account

Maintaining Your Merchant Account

This section of the Merchant Account Information Guide explains one of the most important and most often overlooked aspects of credit card processing, which is how to maintain your merchant account. Many business people expend a lot of time and energy researching different types of merchant accounts and merchant service providers in order to find the best merchant account for their business.

However, once they find the best provider, and open a merchant account, they stop paying attention to the account. The rates and fees on their account are slowly raised, the rules and processing regulations are changed, and even their equipment becomes outdated. By the time they get around to looking at their merchant account again, they will realize that they have been overpaying for months or even years. The great merchant account that they had spent so much time finding has disappeared!

At this point most business people will blame their merchant service provider for raising rates and fees without notification, and they will storm off looking for another provider only to start the cycle all over again.

When a merchant account is left unattended for a long period of time the provider will slowly raise the rates, the card associations (VISA & MasterCard) will release new regulations, and other things will happen that affect the account over time. We call this process merchant account degradation.

The key is to not let your merchant account degrade in the first place. The following section will explain simple measures that you can take to easily maintain the best merchant account for your business.

10-1 Read Your Merchant Account Statement Every Month

More accurately, we should say read and understand your merchant account statement every month. Reading your merchant service statement every month is one of the simplest and most important things that you can do to make sure that your merchant account stays competitive. You may think that some sort of degree is required to decipher the charges on a merchant service statement, but it is really not that difficult once you get the hang of it. We will explain exactly how to read merchant account statements in the next section, but for now we will just cover some of the basic pointers that pertain more to maintaining your merchant account.

Important Notices Section
Your merchant service provider cannot legally change anything about your merchant account without telling you in advance. Most providers and banks require that you be notified of any changes to your account at least 30 days prior to the change taking affect. These notifications will be prominently posted on the first page of your merchant account statement in a section called, " Important Reminders ", " Important Updates ", or something similar. It is absolutely crucial for you to read this section of your merchant account statement every month. It is in this section that your merchant service provider will notify you if your rates are going to be raised, or if the regulations governing your account are going to be changed. If you read about these changes in advance you will have to time to act upon them before they actually take affect.

Verify Discount Processing Rates
You know from reading this guide that there are as many as three different discount rates, and sometimes more, that you may be charged to process credit card transactions. Many different variables can affect how a transaction will be charged on your merchant account, and whether the transaction will be charged at the qualified, mid-qualified, or non-qualified rate. When you sign up for your merchant account you should obviously note these different rates, but do not forget about them after that. Each month you should look at your merchant processing statement to make sure that the majority of your transactions are running through at the qualified (lowest) rate.

VISA and MasterCard regularly release security updates and regulations that may affect the way your merchant account and credit card machine are required to function. Sometimes these changes will require that you to contact your merchant service provider in order to have your credit card machine reprogrammed so that it is able to function properly and comply with any new rules and regulations. Many times these changes will be required in order for your transactions to run at the qualified rate. If you notice a large increase in mid or non-qualified transactions in any given month, you should contact your merchant service provider as soon as possible to inquire why things have changed.

As we had described in section 4 of this guide titled Merchant Account Rates & Fees, different types of credit card will be charged at different qualification rates. Corporate credit cards, travel cards, rewards cards, and so on, are all subject to downgrading to mid or non-qualified discount rates. Depending on the relationship that your merchant service provider has with their acquirer or processing bank, it may be possible for them to manipulate how these card types are charged. It is possible for these changes to be made with or without prior notification to you. This is another important reason to keep a watchful eye on how the majority of your credit card transactions are qualifying.

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