Articles

How to Avoid Chargebacks

Chargebacks can cause a great deal of trouble for a business, especially when merchant accounts initiate fees for them. Credit card processing has a wealth of benefits, but it also has complications such as consumer chargebacks. Consumers initiate chargebacks for a wide variety of reasons including fraud, attempted theft, honest mistakes and discontent. Every business […]

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Building Your Small Business

Accepting credit cards is a necessity for small businesses because it allows them to remain competitive, offer convenient payment methods to buyers and not forego a sale in the event customers come up short of cash. Understanding the world of credit card processing can seem daunting at first, but these 3 key principles help address […]

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Reading Reviews Before Selecting Your Merchant Account Provider

When looking to select a company to use as a credit card processor, it’s wise to choose one that offers all the right services at a good price. However, one should take it further, and here are three things to look at when reading reviews for a merchant services provider. Speed: Without a doubt, if […]

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All About Flagship Merchant Services

Flagship Merchant Services has been helping merchants conduct transactions online for many years. As a leader in credit card processing and merchant accounts services, Flagship Merchant Services has remained focused on giving business owners of all size the solutions they need to effectively do business completely online. How does credit card processing work? There are […]

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All About CreditCardProcessing.com

Without a doubt, when looking to get credit cards processed, one should go with a solid, reliable and trustworthy company. When doing so, it’s easy to avoid mistakes that others suffer from. While true, one should know where to look, and CreditCardProcessing.com is a great place to go, and here are three reasons why. Provide […]

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What is the Bankruptcy Notification Service?

Without a service, it’s hard for people to know when someone went bankrupt, and this is often a problem when dealing with merchant accounts or other financial services. For this reason, the two major worldwide credit card companies, Visa and MasterCard, have developed a service to help people track bankruptcies. With this, people can see […]

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Application fees are rates put in place by financial institutions to cover the cost of setting up merchant accounts. Agencies will also charge processing fees to offset the cost of administering and storing data. In most cases, the merchant account provider will require the vendor to pay the application fee in advance. Agents who are looking to acquire customers quickly may raise transaction fees in lieu of charging up-front costs.

It is rare for credit card processing companies to waive their application fee without attempting to recover this loss. The cost of processing one application may seem insignificant, but it is not financially sound to freely process an unrestricted amount. No agency can operate comfortably if their operating costs become too significant to bear. To stay in business, the merchant account provider needs to incorporate this fee as a fail-safe mechanism. Fees are typically no higher than $100, but these prices are very rarely set in stone. From time to time, an agency may need to adjust their prices to keep up with inflation.

If a merchant account provider offers free application processing, they may be running a promotion or trying to expand their customer base. In most cases, the agency will raise the prices on their back-end services to retrieve the losses incurred from this offer. Vendors need to pay several service and maintenance fees if they wish to maintain a credit card processing account. These vendors are usually oblivious to the various fees connected to back-end services. Because of this lack of awareness, the account provider can quietly raise their prices without informing the vendor. If these increased prices are still reasonable, the vendor will pay unreservedly because they received a good deal in the beginning.

Application fees are not put in place to inconvenience the merchant. They actually do a great job of separating serious business owners from indecisive beginners. Maintaining a credit card account is a huge responsibility for both parties, but the processor assumes the bulk of the risk. Whenever a merchant disables an account, the agent needs to find a way to replace this lost revenue immediately. Repeating this process multiple times is not beneficial to the agent in any way. Account providers can only succeed by establishing strong long-term relationships with vendors. The prospects with the most promise will usually pay the application fee without reserve.