Merchant Account Contracts: The Good, the Bad and the Ugly
Guest post Provided by Charge.com Payment Solutions, Inc. Charge.com a company designed to serve small business merchants that accept credit cards online, while providing low cost and flexible options. Visit the Charge.com website for more information.
When most people hear the word “contract”, be it a cell phone contract or a lease agreement, they shift a little in their seats. Contract sounds like a bad word. Contracts can mean a loss of freedom, and a sneaking suspicion that you’re not the one truly benefitting from it. But there are certain advantages and disadvantages to having a contract with internet merchant accounts.
The Good: Contracts with credit card processing companies do have certain benefits for online merchants. A contract outlines the responsibilities of each party so it is clear and concise.
The Bad: Six month or yearlong contracts are not always in the interest of the merchant. Contracts are made by the merchant service to protect their profits, and rightfully so. But as a merchant you need to make sure that the benefits are in your favor as the merchant if you accept credit cards online. Be sure if you do choose a contract, to read the fine print, make sure the agent hands you all the pages, and make sure there are no termination fees.
The Ugly: But there are many hassles that come with a contract that you may not want to deal with. For example early termination fees that could come with a contract are a bad sign. You need flexibility for your merchant services for more freedom and control. You can’t predict everything in the future as a merchant, and sometimes you simply just need to change your mind about how you do your business. Termination fees can cost anywhere from $300 to $1,000. Say goodbye to a month’s worth of leasing, or goodbye to that new investment that could really profit your business or even goodbye to that new desk chair. There is always a cost of doing business, but why make sacrifices that don’t need to be made?