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MSP Contract Series Week 5: Tips to Protect Your Business

Throughout this series of posts, we’re sharing pointers to protect your company in payment processing terms and contracts. In this final week, we hope you find the information valuable to your business. If you’d like additional information on these blogs, please contact us by clicking here.

Tip 5: Beware of ancillary fees and pricing changes.

The core fees a business should pay are 1) interchange (including dues and assessments), 2) processing fees and 3) sales channel fees. It is important all of these fees are visible on the merchant statement and tie back to the contract agreement. Beyond these fees, it is important to truly understand any additional fees that are often layered into a particular payment processing provider’s contract, and understand how and why they apply to your business.

Always request a detailed “schedule” of fees, which clearly profiles all types of fees included. We routinely find fees that are simply mark-up charges that help the provider make the account more profitable for themselves while taking advantage of our clients.

Processors also commonly weave in clauses that will allow them to change pricing over time. Card brands (V/MC/D/A) themselves update interchange fees, and it is expected that processors would need the freedom to adjust accordingly. However, all too often, we find processors hiding behind reasonable business practices like this to inflate processing or equipment fees. Therefore, ongoing monitoring of the merchant account and fees becomes essential to maintaining cost control over time.

MSP Consulting takes the time to thoroughly vet these fees to ensure they are reasonable for our clients. Time and again, we find many other fees unnecessarily added on, and thinly veiled.

Many companies overpay for payment processing because they do not understand what each fee represents and whether it’s appropriate. With proper diligence and escalation, we have had success to establish reasonable terms that can get the issues resolved.

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