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, let’s 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. We look Forward to Exceeding Your Expectations!