Increased competition in the credit card merchant services industry has prompted many of the vendors to resort to unfair, crooked and intentionally misleading marketing and sales tactics in order trick merchants into signing with their companies.  All too many unsuspecting merchants are falling victim to these dishonest companies while getting the false impression that they are getting a fair, unbeatable, and too good to be true, deal.   Unfortunately, the “Free Wireless Credit Card Machine” deal is too good to be true and any merchant that sets up this account is going to get burned. The fact remains that nothing in life is free, especially a wireless credit card machine that costs all merchant service companies in excess of $600.00 to purchase.  There is simply not enough monthly residual income generated off merchant accounts to justify these merchant service providers taking a six to seven hundred up front loss. So why do they do it?  They do it because the sales reps are only disclosing about one third of the fees and commitments applicable to the account.  The naked eye will see a low up-front set-up fee, a seemingly competitive qualified discount rate and transaction fee, and a fairly average monthly service fee.  What these shady companies do not disclose is an extremely long term commitment with a severe early termination fee, a very high monthly minimum requirement, excessive mid qualified fees and non qualified fees, and additional wireless transaction fees.  The truth is that a merchant account with this type of set-up will generate about ten times the profit than a standard account and the merchant will actually end up paying for the terminal several times over within the 1st year, but the merchant will never own the machine. To top that off the companies are protected from the merchant skipping with their equipment because they have them locked into a long term 3-5 year contract with a cancellation fee ranging from $750-$2000.  So the risk has been mitigated entirely and the deceptive tactics of using the word “FREE” is successfully generating an enormous amount of business.  As a result, an extremely large percentage of merchant service companies are in a panic because of their lost market share and are therefore mimicking this deal, sacrificing their honesty and their integrity, taking unfair advantage of unsuspecting merchants all over the United States and blackening the eye of the entire industry.

We at 1st National pride ourselves on honesty, full disclosure and superior service and support.  We have so much more to offer to a merchant than simply low rates and upfront fees although ours are the most competitive in the industry.  Forty percent of our business comes from referrals of customers who have found that our word is gold and our service is second to none. We would never consider sacrificing our impeccable reputation in a crooked attempt to generate more business.  To compete, we do offer the same “Free” credit card machine deal but any merchant who inquires gets a detailed full disclosure list of every single fee and detail that would apply to that type of merchant account. They also receive our expert opinion and explanation of why it is simply not a smart business decision to opt for the “Free Wireless Credit Card Machine”.

We are appalled by the practices of these other companies and what it has done to our industry.  Our sales reps now have to spend significant amounts of time explaining to perspective merchants that the companies saying “Free, Free, Free” are not being honest.  The purpose of this newsletter is to educate perspective merchants in an attempt to spread the word throughout the industry and to finally put an end to these ridiculous business practices that are all too common.  Below we have listed three sample deals. The 1st is the typical “Free Wireless Credit Card Machine” deal which is crooked and only discloses about 1/3 of the information about the account. The second example is a full disclosure of the same “Free Wireless Credit Card Machine” deal pointing out all of the fees that were hidden in example one.  And the 3rd example is a deal in which the merchant buys a credit card machine for an up-front fee of $619, owns the machine, and saves a significant amount of money in the long run because they are getting the best possible rates and monthly fees in the industry.

We sincerely hope this newsletter helps merchants to make educated decisions and to avoid getting burned when choosing a merchant service provider. For more information on this or any other merchant service related question please call us Toll Free: 866-499-5722 or visit our website at www.1nbcard.com/artisan.html  

EXAMPLE #1:  Typical Free Wireless Credit Card Machine Deal

Up Front Set Up Fee:                               $100-$300 (But you do not own machine)

Qualified Discount Rate:                       1.79%

Mid Qualified Surcharge:                     *NOT DISCLOSED OR METNIONED

Non Qualified Surcharge:                     *NOT DISCLOSED OR METNIONED

Transaction Fee:                                    25 Cents

Additional Wireless Tran Fee                *NOT DISCLOSED OR METNIONED

Monthly Statement Fee:                         $10

Wireless Monthly Fee:                           $20

Monthly Minimum:                               *NOT DISCLOSED OR METNIONED

Annual Fee:                                           *NOT DISCLOSED OR METNIONED

Contract:                                               *NOT DISCLOSED OR METNIONED

Cancellation Fee:                                  *NOT DISCLOSED OR METNIONED

*Even though they are not mentioned, these fees definitely apply to the merchant account.  See below to see what has been hidden.

Mid Qualified Surcharge: This applies to every merchant at every merchant service company. You will see this surcharge every time you take a rewards card, milage card, benefits card or any other card is which the card issuer offers incentive for cardholder use.  Merchants will pay Higher Fees.

Non Qualified Surcharge: This also applies to every merchant at every merchant service company. You will see this surcharge every time you take a corporate card, business card, government card, international card, or manually key a transaction into the machine.  It all of these situations the card issuers & processors assume higher risk or earn less interest so the Merchants will pay Higher Fees.

EXAMPLE #2: FULL DISCLOSURE :  EVERYTHING THEY ARE HIDING
Up Front Set Up Fee:                               $100-$300 (But you do not own machine)

Qualified Discount Rate:                        1.79%

Mid Qualified Surcharge:                      2.79%  (30-40% Of Cards, Very high Rate)

Non Qualified Surcharge:                      4.79%  (25%-35% Of Cards, Very high Rate)

Transaction Fee:                                    25 Cents (Very High Transaction Fee)

Additional Wireless Tran Fee               10 Cent (This makes Total Tran Fee 35 cents)

Monthly Statement Fee:                        $10  (High)

Wireless Monthly Fee:                          $15-20

Monthly Minimum:                               $25.00  (Charged even when you don’t use it)

Annual Fee:                                           $99.00  (Should be zero)

Contract:                                               $3 Year ( Long Term. What if service is poor ?)

Cancellation Fee:                                   $795  (OUCH!!!)

So in a nutshell this account has an up front fee ranging averaging $150, a total of $63 in monthly fees (Whether you use it or not),  a per transaction fee of  35 cents,  Mid qualified fees .5 % higher than they should be, Non qualified fees 1.4%, higher than they should be,  an 3 year commitment with a $795 early termination fee and you will never own this machine.

EXAMPLE #3: THE SMART MOVE: Buy a machine, own it and get great rates!!!

Purchase Price:                            $619 (You own it. Brand new state of the art machine)

Qualified Discount Rate:                       1.76%

Debit Card & Check Card Rate:              1.49% (about 30% of cards and you save a lot)

Mid Qualified Surcharge:                      2.29%  

Non Qualified Surcharge:                      3.39%

Transaction Fee:                                     22 cents   (You save 13 cents per transaction)

Additional Wireless Tran Fee                 None  

Monthly Statement Fee:                          $8  (You save $2.00 per month)

Wireless Monthly Fee:                           $15-20

Monthly Minimum:                                NONE  (You save $25 per month)

Annual Fee:                                           NONE (You save $99 per year)

Contract:                                               $1 Year (Short Term: We know you’ll like us)

Cancellation Fee:                                   $100  (Not excessive & painless if you cancel)

This is hand down the better choice all around.  If you cannot afford the upfront fee there are payment plans available, or less costly options from you can upgrade later.  If any of this is unclear please call Toll Free: 866-499-5722. We will take as much time as needed make sure you understand completely.