Merchant Account Comparison Chart
I'm often asked via email why this site doesn't have a lengthy merchant account comparison chart. The answer is simple - intricate comparison charts are useless.
Anyone that's done research to find the best merchant account knows the charts that I'm referring to. They're laid out as neatly constructed tables with merchant service providers organized in ascending order by the rates and fees that they offer.
There are two big problems with these charts that render them virtually useless. First, they're extremely biased. Second, you can't accurately compare merchant accounts from one provider to the next because there is no set pricing structure to use as a basis.
The first obstacle to a useful comparison chart is that they're often constructed and hosted by merchant account providers or their affiliates. Not surprisingly, the provider that hosts the chart always has lower rates and fees than their competitors.
Take this chart for example. The provider that's hosting it has the lowest rate and fee for every single category. If competitors were named on this chart and you were to contact them and note that they're listed as having worse rates and fees than the hosting provider, they would chuckle and offer to beat them.
This comparison chart is a rare example that's hosted by an independent source, the Minority Business Development Agency (MBDA). Unfortunately, the MBDA isn't doing their members a service by posting this chart for the reasons that are outlined in this article. Furthermore, it appears that they've copied much of the chart from a web site that is an affiliate and a merchant service provider. In fact, the same chart that the MBDA has copied is also being used by this web site for the purpose of generating marketing traffic.
A closer look at all of these so-called useful comparison charts reveals that they haven't been updated for years. In the case of the chart that was copied the MBDA and others, it hasn't been updated since 2002. The merchant service industry evolves quickly and I can assure you that a lot has changed in the past 7 years - which brings me to my next point.
The second and perhaps largest obstacle to an accurate merchant account comparison charts is that merchant account fees are inconsistent by nature and can change frequently. In fact, rates can change as often as twice a year when Visa and MasterCard adjust their interchange fees.
On top of the frequency with which rates and fees change, the tremendous amount of competition in the payment card industry leaves pricing constantly in flux. Providers will always work to match or beat their competitor's rates. There is no set pricing structure from one provider to the next that can be used as a basis for an accurate comparison. To further support this point, I have yet to see a merchant account comparison charts that takes into account the less expensive interchange plus pricing structure that has begun to grow in popularity as of late. They all seem to focus on tiered pricing.
It seems logical that a comparison chart would simply the process of finding the cheapest merchant account, but as most people eventually realize, there's nothing simple about credit card processing.
A comparison chart can be useful for determining the cheapest merchant account for your needs, but it's not going to be some random chart you stumble across on the Internet. The only useful chart is the one that you create yourself by contacting different providers and working with them to nail-down the rates and fees that they're willing to offer you. You'll be happy to see that these rates and fees get lower and lower as providers compete for your business.
If you would like help in gather legitimate, unbiased merchant account information, you can use a free web site like CardFellow.com to get personalized quotes from multiple merchant account providers. Whether you choose to do the research yourself or employ the service of a web site like CardFellow, don't be fooled by these generalized, out-dated merchant account comparison charts floating around the Internet.
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