E-Commerce, Web Businesses/service merchant


Hi Thomas,
I own a small business and need to change my credit card processing merchant. Once the word got out that Iím looking for a new merchant I got bombarded with offers...and theyíre still coming, and theyíre relentless, phone and emails. Iíve read at least 15 offers and Iím now thoroughly confused. There has to be a lot of passive money to be made for these companies to be so aggressive with such a small company as mine. AnywayÖ
What I want is probably what every business owner wants, a company that is reliable, inexpensive, and no surprise fees & cost and no surprise contractual obligations.
Weíre a small specialty retail store front business so credit cards are face to face. In the near future we would like to expand and have a website. Not sure how credit cards work on the website, but something for us to keep in mind when choosing a merchant service.
How do I compare one company to another, comparing apples to apples?
I used CardFellows and was confident with the choice, but the companies who arenít on CardFellows tear apart there offers and vice-versa.
Iím so confused and cc processing is so important to my business. Almost everyone uses a cc.

On a side note, what is the deal with American Express? Iím constantly told they are the most expensive card to process. In my mind they should be the cheapest; they issue and process their own cards, no middleman, correct?

I read your profile and you are absolutely correct, I donít know what Iím being billed for and the other business owners Iíve talked to donít know either.
Thank you,

Hi Randy,

It looks like you have fallen into the abyss of leadgen vendor referral mayhem. The reason you have become overwhelmed with diligent and relentless sales representatives is because the companies you submit your information to charge those vendors a nice fee for access to your information. They just want to see a return on their investment, regardless of the anticipated profit on your account.

I am a firm believer of a concept in service related industries that most do not recognize: "Your relationship with a company is only as good as the folks assigned to handle your account." Your first method of inquiry should not be about price. Every processor will be able to compete on process with a very thin margin of difference. You should find out how long the agent you are working with has been in sales, whether they have direct experience working with companies that have similar set-ups as the one you have and want to have for the future.

Once you have a qualified and credible agent relationship, you can then turn to how much your service will cost. This is where it gets hairy. The good news is, if you insist on interchange plus pricing, you will be aware of the exact profit your processor earns for handling your account. In other words, if your pricing is interchange plus 0.29% and $.10 per transactions, you know that for every $100 you process, your processor earns $.39 in fees. The rest goes to to the card brands and the banks that issued the card in the first place. Now all you have to do is negotiate the "plus" rate and the monthly fees.

Don't pay application fees. Don't pay set up fees. Don't pay early termination fees. The market is competitive enough where you can insist on this and win.

As I'm sure you know, I have this account to help answer questions and build my reputation as an industry leader. I also contribute to a payments news publication. If you would like a semi-biased opinion on which deal you have is the best, feel free to e-mail me directly for an analysis more specific to your business: twaters@bams.com

I like the logic behind your thought process when considering AMEX expenses. They have been traditionally higher in rate compared to bank issued card brands because they set their own prices. Bank cards are semi-regulated so the fed as well as business lobbies have some influence in pricing which help to drive costs down. Believe it or not, you end up paying for your customer's rewards programs which contributes to the expense associated with processing a charge card or cashback card. AMEX has begun to open up their grip on payment processing expenses and it is now possible for processors (such as BAMS, my company) to reduce the rate for processing their cards.

If you'd like to learn more about how to get a lower AMEX rate as well as some of the soft benefits you did not know about, feel free to send me a private message. Otherwise,  I hope this answers your question!

Good luck out there!

-Tom Waters  

E-Commerce, Web Businesses

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Thomas Waters


I can answer questions from business owners on how to reduce risk and cost when accepting any form of electronic payments. The Credit Card Processing industry is immense and many business owners simply do not understand how they are being billed. I have contributed to the conversion, re-engineering, set-up and integration of the credit card acceptance methods for over 1,000 clients. For over 15 years I have seen the rise and fall of thousands of businesses of all shapes and sizes. I have knowledge and information on how to set up and run many different types of companies.


For over 15 years, I have helped CFO's, Accountants, and Office Managers make sense of their credit card processing programs. I currently operate a cost reduction consulting company to help businesses find and eliminate unnecessary fees in their fixed cost expenses: https://costfixed.com/

Delta Sigma Pi, International Business Fraternity, Member since Fall 2004, CostFixed (CostFixed) https://costfixed.com/

The Greensheet

State University of New York at Albany 2002-2006 Bachelor of Science, Information Technology Management and Marketing

Awards and Honors
Certified Payments Professional

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