Zions Bank is one of the nation's premier financial services companies, operating over 350 full-service banking offices in the Western United States. Laurel Kristofferson is the Merchant Services Provider at Zions Bank, and we invited her to tell us what to look for in Merchant Accounts.
 Credit card capability is a critical element in any business. Just by accepting credit cards you can double the size of your sales transactions. The average cash transaction is $30 while the average credit card transaction is $70. If you are selling anything to the public, credit cards can improve your profits. Not all merchant account providers are created equal, however. It is important to know what you need and where to find it.
There are three elements which every business needs to conduct business on the Internet - a web site, a gateway, and a merchant account. A gateway is the means of transferring the transaction from your web site to the credit card processor. The e-commerce tools in EZ-NetTools™ have been developed to integrate seamlessly with Authorize.Net - one of the leading gateways in the industry. However, the third element, a merchant account compatible with Authorize.Net, can be obtained from many different sources.
All of us have heard the horror stories about merchants that have paid too much and committed to a contract for too long with a merchant account provider. The best advice that I can give regarding merchant services accounts is to make sure you choose a reputable company. Will they provide references? Have they disclosed all of their fees, and are they written down? Are there any setup fees? Do you have to sign a long-term lease? The most important question of all is, do they provide service? These are all questions that you need to ask to avoid being all too quickly separated from your money.
If you have ever accepted credit cards before, you will be familiar with the term discount rate. A discount rate is a fee that is paid on each credit card transaction. A processor discounts your credit card transaction by a certain percentage. That discount rate is generally higher on Internet/Mail Order transactions because the risk of loss to the credit card processor is greater in these scenarios. Discount rates can vary from provider to provider, but they are not the only factor to base your decision on. A common ploy in discounting is to quote a low discount rate and then charge fees for every other service (monthly fees, transmittal fees, etc.). Sometimes the processor with the highest discount rate can be the least expensive in the long run. Look at all of the costs involved. The whole process of acquiring a gateway and a merchant services account can be done for around $300 up front and a minimum of $55 per month.
Beware of promises that sound too good to be true. For example, it is possible to make some money off of each client that you resell a merchant services account to. When a reseller sends my bank a customer, for example, we will pay the reseller $100 for each account that we are able to get approved and logged onto the system for 90 days. The drop out rate is higher in the first 90 days. If you hear a promise of a return that sounds too good to be true, it might be. Buyer beware.
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