Credit Card Processing Comparison Charts
I'm often asked why this site doesn't have a lengthy merchant account comparison chart. The answer is simple - intricate comparison charts are useless. Charts are easily manipulated, leaving you to try comparing apples and oranges. In this article, I'll explain why processor comparison charts don't provide the information you need and how you can truly compare apples to apples instead.
- Credit Card Processing Comparison Chart Problems
- How can I compare processors?
Credit Card Processing Comparison Chart Problems
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 listing the rates and fees offered by different merchant service providers. In many cases, the charts compare rates for tiered pricing models, but interchange plus charts can be just as misleading.
There are two big problems with these charts that make them virtually useless. First, they’re almost always provided by a company trying to get your business, so they’re extremely biased. To the processor, comparison charts are a sales tool, not an educational piece to help you.
Secondly, you can't accurately compare merchant accounts from one provider to the next because pricing has no set terms to use as a basis for comparison. Without standardization, the charts are just comparing apples and oranges.
Comparison Charts Offer Biased Information
As I mentioned, the first obstacle to a useful rate comparison chart is that they're often created and hosted by merchant account providers or their affiliates. Not surprisingly, the processor that hosts the chart always shows lower rates and fees than their competitors, but there’s no way to verify if that’s actually the rate you’ll pay. If you make a decision based on the rates in these charts, you could fall victim to credit card rate bait and switch tactics.
Published Pricing Can Be Easily Manipulated
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. So the rates you see published in a comparison chart can quickly become out of date.
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. Processors work to match or beat their competitors’ rates. This is especially true of providers who quote using tiered or bundled pricing, which can be easily manipulated by the provider.
Processors aren’t required to use a particular pricing structure, which means there are no standards that can be used as a basis for an accurate comparison chart. To try to beat the competition, sales reps might waive fees, change contract terms, or lower equipment prices to entice you to sign up with them. Even when you’re reviewing rates from one processor it’s possible to get different quotes from different sales representatives working for the same company. What you see in a rate comparison chart might not be what you get, making it impossible to choose based on comparison chart rate information.
Processors who offer to pay cash if they can't beat your current rates are a perfect example of how prices can be manipulated. They will always be able to "beat" your current rates by offering lower, but just because they've given you a lower rate doesn't mean you actually pay less. The processor can decide that almost none of your transactions "qualify" for the lowest rate. So even though you're quoted one low rate, the majority of your credit card sales are charged at a much higher rate.
Related Article: The Truth Behind "$500 If We Can't Beat Your Rates" Offers.
How can I compare processors?
Rather than using a misleading or out-of-date comparison chart, the best solution for comparing processors is to obtain accurate pricing information that uses one pricing model (preferably interchange plus) and compare offers yourself. Remember that even interchange plus pricing by itself is not a silver bullet.
If you would like help gathering accurate merchant account information, you can sign up for free here at CardFellow to get personalized quotes from multiple merchant account providers. All of the providers in CardFellow’s marketplace are required to offer quotes using interchange plus pricing structures, allowing us to ensure a standard for an apples-to-apples comparison that you can actually use. Check out this video to see how it works:
Whether you choose to do the research yourself or use an impartial website like CardFellow, don't be fooled by misleading, biased merchant account comparison charts floating around the Internet.