Merchant Account – How to Keep More Money AND Get a Lower Rate!

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I’m not going to beat around the bush – You’re most likely OVER PAYING for your merchant account right now (or you will soon be if you’re just getting started). I know because I learned this the hard way… Also, it’s not an option anymore – you absolutely MUST accept credit cards both online and offline. This is the company I recommend and use for my online services and products and my studio:

My Merchant Account to Process Payments:
>>> Practice Pay Solutions

READ ON to learn how to save money and pocket more of your hard earned cash!

When you’re first setting up a merchant account be sure to remember that you CAN negotiate rates!

Merchants have a range of between 2.5 – 4.5% that they charge per transaction (plus about $10 a month). Some even add on another $.25 per transaction.

When I first getting my studio up and running I just took what they gave me because I was desperate to get everything going FAST.

Eventually I went back to them after I stared doing 15k+ a month consistently and asked for a lower rate…

(I went back again to lower my rate another .25% when I was doing 50K/month)

Here’s how to do it:

Go to 3 other banks and merchant accounts and tell them what you are currently doing or projected to do in sales each month. Tell them you are “shopping around for the best deal.”

Then after you get 3 or more quotes go back to each of them and tell them the company name and the rate of the lowest competitor (kind of like shopping for a car!).

The higher priced merchants will then come back with a lower rate offer which you can then use ONE MORE TIME to go back to each one and see if they can do it for “X.”

Basically, you’ll give them your number (about .25% lower then your best offer so far) and take it to the company you’d like to work with most.

Here’s what you say to them over the phone.

“I’ve been getting quotes from 5 different merchant account companies for the last week and to be honest I like your company the best. The problem is that your rate is a half a percent higher… Is there any way you could come down at all to match “company X? IF YOU’D BE WILLING TO MATCH THEM I WILL SIGN UP RIGHT NOW.”

They will most likely come down .25%  – exactly what you wanted ; )

You never know they may even come down the full .5%!

Follow these instructions and if you charge even 10K a month you most likely just saved $1,200 a year!!!

I love this tip  ; )


Comment on this Content

  • Jason Zawodniak


    I’ve been open for 2 years now and I’m looking to negotiate my fees down. Below is a summary of the email they sent me. It appears I’ve been over paying for some time now but I wanted to confirm I was reading it correctly.

    I wanted to confirm I’m focusing on negotiating the ACH flat fee of .55 and .25% for transactions over 5,000.

    Thank you.

    First week of the month : $34.95 billed for the monthly gateway fee.

    Flat Fee of $0.29 per credit car transaction, plus:

    Visa/MC/Discover :
    Qualified rate: 2.39% (usually debit cards)
    Non-Qualified rate: 2.39 + 1.20% (usually cards that have rewards or miles)
    Reward downgrade: + 0.11 (usually corporate or government cards)

    Capture Fee: This fee is assessed each time a batch closes and a lump sum deposit is made into your business checking account. Each batch is $0.29.

    ACH transactions are charged a flat rate of $0.55 per transaction, and 0.25% for any transaction over $5000.00.

    • Hi Jason,

      I always try to negotiate the fee down to 2.9% total to match and other competitors.

      It is always best to show them the other “deals” you could go with. A proven track record and another competitive offer will give you leverage. You may also be able to waive the $.29 per transaction and only have to pay the %.

      Hope this helps!

  • Tina Davis

    i know one bank charged a flat rate to do auto debit the fee was 60 bucks amonth not sure if there were anymore fees attach to that

    • The company I use is only $10 a month and then the credit card companies take a percentage

  • Tina Davis

    what company do you recommend for recurring billing.? I prefer to setup my clients on auto pay. I hate going to the bank 10 times a month and getting half pymts !!

    • Hi Tina,

      Please refer back to the beginning of this post and click on the green link for my recurring billing preferred provider.

  • Andrew, thanks for the updates on PayPal!

  • Hi Robby,

    Great question.

    #1. Not everyone has a PayPal account and that is a barrier to purchase. Some people may not want to sign up for one either.

    #2. I manually input my studio EFT invoices the first time around. This way here it is done right and I only have to do it once.

    #3. To my knowledge PayPal does NOT do recurring billing which should be a MUST in your business… you don’t want to have to be the bill collector each month!

    • Andrew Voris

      paypal does do recurring billing and many other cool features and this is why I still use them for billing my online training and purchases directly from my site for products but I use another source for my EFT training billing.

      If you set up your merchant account, payroll, banking, savings, credit cards, investing, and others at the same bank like Chase you end up with great rates and low to know fees on most things.

      I am sure that I am still a small business to them but they treat me like gold and help me when I do get hit with a fee I should not have. That’s great for me to say about a bank because I hate most banks!

      Most banks have great relationships with vendors you will need also… towel and mat guy, uniform guy, water delivery, marketing sources, and more all come from banking relationships.

  • Robby Blanchard

    Just out of Curiosity, why not just go with paypal for payments? There is no monthly fee and it is very easy to use. Just wondering.