| Subject: Free
Equipment - Rebate Programs |
Paynet
Systems strives to offer the best overall
pricing possible. With that said, when searching
for the deal that makes the most sense for
your business, you need to compare apples-to-apples.
While many companies claim to be giving
away "free" equipment and huge rebates,
you should ask yourself - "Is this really
free?" As the saying goes - "Nothing worthwhile
in life comes without a price". So how are
some companies providing credit card equipment
for "free"? Itīs simple really; and we hope
you take the time to determine if this type
of program is beneficial or actually more
costly. |
| Things to look for: |
| Long-Term
Contracts |
Many
credit card processors have a 3-year term
found within their contract. This means
that if after a year you find a better deal...youīre
stuck! Paynet Systems is so confident you'll
remain a satisfied customer; you are free
to cancel your Credit Card Processing Agreement,
any time, penalty free. |
| Cancellation
Fees |
| Commonly,
cancellation fees are assessed when service
is cancelled prior to the binding term found
within the merchant agreement. Industry
averages range from $195-$300 for early
termination. Again, if you find a better
deal prior to the expiration of your contract
and leave, you will be charged the cancellation
fee. Additionally, many of these companies
will require you to return the "free" equipment
if the full 3-year term is not satisfied. |
| Annual
Fees |
| Many credit card
processors will charge an Annual Membership
Fee. The industry average is $75-$125. Therefore,
if you are committed to a non-cancelable contract
of 3 years and each year you are assessed
a $75 annual fee, you quickly see the word
"free" lose its meaning. |
| Batch
Fees |
This is the accumulation
of captured credit card transactions in the
merchant's terminal or POS awaiting settlement.
Many processors charge a daily batch fee of
$0.25 or more; this adds up to $7.50 or more
a month in additional charges! Remember, many
credit card processors have a 3-year term.
So, letīs look at this mathematically. If
batch fees are assessed daily, you pay $270
in additional fees over 3 years.
$7.50 (monthly in batch fees) x 12 months
= $90 per year x 3-year contract = $270 in
extra fees over the life of the contract just
for the privilege of using their service. |
| Proprietary
Equipment |
| Many companies
password-protect their credit card machines.
This simply means the "free" equipment
is not interchangeable with other companies.
What this really means is while you are charged
additional fees for the "free" machine,
it was never YOURS. Rather, they are lending
it to you while you remain their customer. |
| Monthly
Minimums |
Most Merchant Service Providers
have a $25 minimum monthly quota for Visa/MasterCard
fees. If the minimum quota is not met within
the month, the merchant account provider
will make up the difference with additional
fees. For example, let´s say your
discount rate is 2% and you processed $1,000
for the month, then that would be $20 in
discount fees (0.02% X $1,000). If your
monthly minimum was $25, then you would
be charged the $5 difference in order to
meet the $25 minimum.
Summary:
While we all like to hear the word "free",
we also need to remember that no business,
yours included, can survive without turning
a profit. Although promotions set forth
by businesses often use the word "free"
liberally, only research can determine if
this is a valid representation of the truth.
If Paynet Systems can be of any assistance
during your research phase, please feel
free to contact us.
As Always...We look Forward to Exceeding
Your Expectations! |
