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Knowledge is Power

Knowledge is Power


With such a large portion of business these days on plastic you need to know everything you can about the industry. It usually represents one of the highest expenses a business had each month too. So what can you do to better understand Merchant Services?

Do your research

Google it! There is a ton to know about the industry and how you can manipulate it to benefit your business or cost you less. If you take the time to learn just a few things then you will have the upper hand in negotiating versus the salesperson you are talking to. I will outline a few here.

Interchange Rates

You probably have heard of this term and may even be familiar with it. Simply put, Interchange is the actual cost of the given card you are taking. There are three levels of interchange in a retail business. Swiped, the cheapest. Keyed with AVS (address verification service), second highest. Standard or EIRF, the highest rate you can pay. Interchange is also becoming a very popular way to set up an account. It is by far the cheapest way too. You should have a basic understanding of Interchange.

I like the explanation here

You can always learn the whole thing since Visa and MasterCard are public companies by visiting,


PCI Compliance

PCI Compliance has been around for almost a decade now and many of you are still paying non-compliant fees. You may see this on your monthly statement as a monthly charge. It is one of the easiest fees to get rid of all on your own. Many times you just have to visit the companies site and answer a questionnaire and it goes away. For most of you this needs to be done once a year or the fee will return until you do it again. Most of the time when you become compliant your provider will refund some of the non-compliant fees too; just ask.


If you have ever taken cards then you are familiar with contracts and early termination fees. One common misconception is that contracts are required. This is simply not true. Every processor will waive their contract in most cases to get the account. Another false truth is that if you are under contract then your rates won’t change. If you actually read all the fine print there is always a section that states the processor can change your rates and fees at will with a simple notification. All contracts really do is hold you prisoner to that company and make sure you can’t just switch without a fee. When you are entering into a new agreement with a company and they say they will waive the contract make sure it is noted on the original paperwork or you could get caught up in a contract even though the rep said there was no contract.

Tiered Rates

This can be confusing for most merchants to decipher what they are actually being set up with for rates but there is one easy way to tell. If you have more than just one rate from the company then it is tiered. This does not include any Interchange rates. If you are being proposed a rate for Debit, Credit, Rewards, and key entered cards then most of the time you are being proposed a tiered account. You DO NOT want such an account. The main reason for this is because the processor will make a larger mark up on a given card than a flat Interchange rate would give you. 99.99% of the time Interchange is the way to go. The other .01% of the time the rep messes up and charges you too little for a category and the company loses money on you. Make sure you ask questions on how they are setting you up, Interchange or Tiered.

Free Machines

You have seen the advertisements and maybe even gotten a “free machine” from a company. I hate to say it but it’s true, nothing is free. What do you have in your business that you would just give away because someone is interested in shopping there? Companies have to spend money to get the terminals. If they give it to you then where does that expense go? Most of the time they will add an additional annual or monthly fee. They will also tack it on your rates so that you slowly pay for it over time. The best part of this is after you have been with that company for a few years they have made three times the value of the terminal off you and you never own it. If you switch you are required to return the terminal or pay a fee to keep it.

Ask for better rates

It never hurts to simply just ask if that is the best a company can do. There are numerous ways to set up accounts and adjust fees. Some will give you a really low rate but a high monthly fee while others are just the opposite. No matter what they are proposing ask them to go lower. I’d be willing to bet they will just to get the business. In closing there really is a ton to know about the industry. The points above are just the surface and the most common things I see customers fail to check on before they commit to a company. If you have questions feel free to Contact Us and we can help with them.

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About Us

North Country Processing LLC is a consulting company specializing in business products and services. North Country Processing LLC is not a Merchant Service Provider.

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