This article about a
merchant account contract and more information to help businesses get a
cheap merchant account is available at MerchantCouncil.
Many of the negative feelings toward the merchant account industry are born out of stories about lengthy contract terms that carry steep cancellation fees. The negative stereotypes that these stories create aren't totally undeserved but their origins are quickly becoming a thing of the past.
Not too long ago merchant account contracts were the norm in the credit card processing industry. In order to begin accepting credit cards businesses had little choice but to sign a merchant service agreement that carried a term. Terminating the agreement prior to the end of the term meant paying a cancellation fee.
While some merchant service providers still insist on placing a contract and cancellation fee on their merchant accounts, competition is making it tougher to do. If you're looking to accept credit cards as a form of payment for your business there are couple things that you should know about contracts.
First of all, not all merchant accounts require a contract term - some are month-to-month arrangements. Competition in the online marketplace has been especially effective at forcing providers to drop contract requirements. Many providers no longer require that merchants agree to a contract term when opening an account. You can find these providers by getting quotes through a website like CardFellow or by doing a search with your preferred search engine.
Negotiation is vital to avoiding contracts. There's a lot of competition in the credit card processing industry and providers are willing to do what they can to gain your business. They'll do their best to waive a cancellation fee if it will help close a deal. All you need to do is ask. Keep in mind that almost everything is open for negotiation when it comes to merchant accounts.
If you're already stuck in an account with a contract, there are some ways that you may be able to avoid paying the cancellation fee when closing the account. First, scour your merchant service agreement for a clause that waives the cancellation fee if rates and fees change during the contract period. If this is true in your situation, you will be able to terminate the account without paying a fee.
The second option is to switch to a new provider that is willing to pick up the tab. If your business is processing a large enough volume to justify the expense a new merchant service provider may be willing to pay the cancellation fee on your current account if it means they will earn your business.
