Nov 5

before signing up with a merchant account provider.  This isn’t “the sky is falling” type stuff.  Just a quick overview about a few tidbits of information you should know about credit card machine options before you sign a contract.

For starters, you should avoid accepting an agreement that includes, or pushes for, a credit card terminal lease.  There just isn’t a good reason for this.  Ever.

If you ask me, any sales rep suggesting that this would be good for you is reason alone to talk to someone else.  Just check out the previous article and read carefully to find out why.

So instead of the lease, here are 3 options you should definitely consider…

Wholesale

One option is to do some research online and pick up a credit card machine direct from a supplier that does NOT do merchant processing.  You can get a really great price on the equipment.  Just be sure to ask about the need for reprogramming.

You can also check out ebay (now that most of the scammers are gone).  Lots of folks sell their older or no longer needed equipment.  Again, be sure that it can be reprogrammed.

One quick tip:  LinkPoint machines can NOT be reprogrammed.  Ever.  So avoid these like the plague.

Retail

Another option is to just buy the darn thing.  Here’s where you’ll find out how the sales rep gets paid.  If they insist on a huge markup, you’ll know that they only make their money on selling you the equipment.

And that’s a problem, because once you sign up, you’ll probably never hear from them again.  And since you’ve done your research (hopefully), you’ll have a pretty good idea of how much the darn machines cost anyway.

Now, not all machines are the same.  But with your research, have the sales rep justify their price to you.  Okay?

Free Equipment Programs

Finally, there are free equipment programs available.  In fact, more often than not this is the option most of my clients prefer (if they qualify).  Not only is the credit card machine free, but some programs offer free replacement of defective machines for life.

Now, in my book, that’s not a bad deal.  Just be sure to understand the requirements of the program before signing up and you should be fine.

If you’d like some help in deciding which option is best for you, send us an email to info@ampyourcashflow.com and we’ll help you out.

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Nov 3

You’ll have to excuse this post if I go off on a tangent and rant a bit about unscrupulous (read “jerky”) web designer types.  As you read the article you’ll understand why.

These tips are really basic, so if you’ve been up online accepting payment, this will seem very basic to you.  But of late we’ve been getting a lot of calls from folks interested in learning how to turn their site into an “ATM machine,” as well as those turning to the internet for the first time.  To answer some of those questions it just seemed to make sense to put down these basic tips to get started on the “right foot” so to speak.

Choosing Your URL

It may seem strange to begin by discussing web-stuff (instead of credit card stuff), but trust me on this one.  It IS important.

Why?

Well, getting this wrong will cost you time, and money.  Here’s an example from a conversation with a new client just a few weeks ago.

In discussing her site to better integrate the payment gateway (usually authorize.net, but there are other alternatives), it turns out that she didn’t actually register the site herself.  Her web-guy did.

And that was problem number one.  Turns out she doesn’t even own her own webname.  The URL of her choice is owned by the very web-guy refusing to fix site navigation issues.

You don’t have to be a rocket scientist to see the problem here.  Why would she ever want to drive traffic and build an online web presence when the very name, the very URL used to identify HER business, isn’t even owned by her.

That’s strike one.

Your Website

Let’s discuss the next two critical aspects of your site.  They are…

  1. Hosting
  2. Bandwidth

Let’s revisit the case study above, about the new client with serious web issues.  Care to guess where her site is hosted?  If you guessed her web developer, you’re right.

And that’s the WRONG way to go about things.  For example, can your current (or former) web developer guarantee your site’s uptime?  Even during power failures?

Will they continue to host your site, without problems, even after the engagement is over?  How secure is their server?  Can the guarantee your site’s security?

One client called one day frantic, because someone (or some ones) were hacking into her website and shopping cart on the back end trying to compromise her payment gateway.  The good news?  That no credit card numbers were compromised.  The bad news?  She nearly lost her merchant account, because millions of dollars of bad transactions were stopped, but barely.

The back office just didn’t want to deal with the risk, and wanted to make sure her shopping cart solution would be safe and secure in the future.

Just a few questions to ask.  And here’s another point, and it’s even more important than the previous two issues.  And that issue is…

Bandwidth.

Let’s break it down in understandable terms.  Bandwidth is about how many folks can visit your site at the same time without the flow of information becoming compromised.

Meaning, what would happen to your site if 1000 site visitors all landed on your site at the same time?  Would the server handle it?  Or crash?  Could they still receive your information?

Now, hosting a site with your local web developer could be a problem.  And the reason is simple.  Could their servers handle the info?

More importantly, is your web developer assuming that your site will NOT get lots of traffic.  Are they short-sighted?  Since most web developers have NO idea how to market a website, will your specific site be hampered by limited bandwidth, stunting your online business growth?

Your Gateway

Make sure that your shopping cart solution (software or virtual) accepts a wide range of payment processing platforms.

Case in point.  One potential client emailed me anxious to get up and running, and they heard from other folks that we were able to come up with a solid solutions for a reasonable price.  As he detailed the software he was using for his shopping cart, one problem emerged…

It only integrated with 3 payment gateways.  And I had never heard of any of them.

That’s a problem.

There are certain industry standards out there.  Authorize.net happens to be one of them.  It’s not the only one, and lots of gateways work well across many platforms.  But you need to ask this question when you’re setting up online payment processing.

Be sure that ALL your systems integrate well before you sign up for services you may have to cancel later.  Remember, some services and payment processors will charge you an early termination fee.

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Oct 15

In my opinion, there is no bigger rip-off in merchant account services than the credit card terminal lease.

So what’s the catch?

Well, for starters, you can’t cancel them.  At least, not until 48 months have passed since signing on the dotted line.  And then when you’re finally able to cancel, provided you remember to call up the company to stop your monthly payments, nine times out of ten they’ll ask for the credit card terminal back.

Which means… you’re right back at square one, needing a credit card terminal.  Again.  And wasn’t that the problem when you signed up for the lease in the first place?

So what can you do?

Three Reasons Owners Sign a Lease

To understand why do many business owners choose to sign up for a lease, rather than buying the equipment, there are three key points.

First, the majority are opening their first business, or are accepting credit cards for the first time.  Their concern, understandably, is to get up and running as quickly as possible.  The focus is on the grand opening.

Or if they’re already in business, getting set up like yesterday because, more likely than not, they’re responding to customers asking (begging?) them to accept credit cards.

So time is usually a critical factor.  And this means NOT looking at or asking about the finer points of these contracts.

The next reason why business owners fall for the “lease trap” is the failure to realize that accepting credit cards is much more complicated than they initially thought.

In fact, I hear this one all the time.

Let’s be honest with ourselves for a moment here - how many of us read the fine print of service agreements or contracts?  Very few people, in my experience, will pour over tiny fine print covering 4, 5 or 6 pages of legal-speak.

And most sales reps know this.

Their goal is to get you to sign on the dotted line.  It’s is NOT to educate you, to explain all the finer points of the agreement or contract (heck, many of them don’t even know all the details).  So no one mentions that the lease is non-cancelable.

Or that, in the long run, it will cost you WAY more than the credit card terminal is worth.

And that bring us to the third reason, which we’ll discuss below.  This point involves the “psychology of pricing.”  What sounds like or seems like a better deal to you, $700 out of your pocket right now, or $39 a month?

If you’re like most people, the second price point SEEMS like a better deal.  Hey, it even looks better on paper.  Which is why we’ll discuss…

The True Cost of Credit Card Terminals

Lease programs are sold by hiding the true cost to the business owner.  Though they are disguised as a payment plan (the QVC effect), they are NOT a payment plan.

So how does this work?

The first step is to over inflate the price of a credit card terminal.  Often the cost is disclosed as  $500, $600 or more.  And so, the pitch is…

“why pay $500 out of pocket, when you can lease a terminal for $35 a month?”

The key is to focus your attention