Merchant Services Advice From Industry Expert Bill Pirtle

This is part 2 of my phone interview with  Bill Pirtle , author of Navigating Through the Risks of Credit Card Processing.  Part 1 can be found easily by clicking here.  I appreciated the chance to heard directly from a foremost industry author and trainer, his thoughts on the Certified Payment Professional (CPP) program.  I believe listeners will appreciate his top three pieces of advice in choosing a merchant services provider and I’m certain everyone will enjoy a laugh at his entertaining stories of his personal experiences.

I appreciated him taking the time to share with me for this interview and I always enjoy the camaraderie.   I’m definitely looking forward to seeing where the future takes him!

Lowest Rate Merchant Account! Beware…

Navigating Through the Risks of Credit Card Processing by Bill Pirtle

Navigating Through the Risks of Credit Card Processing by Bill Pirtle

Business owners shopping for the lowest rate merchant account are often missing critical information that will cost them.  The most common first question I get from someone shopping for credit card processing is “What’s your rate?”  Unfortunately, it’s not as easy as just one industry wide benchmark rate that makes for easy comparison.

Now I understand that business owners are busy and they just want the bottom line number and that’s exactly why they’ll end up paying more for their merchant service program overall even if the quoted rate they go with is the lowest!

Here’s the reason why.  There are many, many factors and charges in this industry.  It isn’t regulated as far as charges go and it is non- standardized, allowing for various charges depending on situations.  This also opens the door to many discretionary charges beyond just a discount rate.  These charges may include large monthly minimums, equipment charges, annual fees, application fees, PCI compliance and non-compliance fees,  monthly membership fees, monthly membership club fees, mid qualified and non-qualified penalties, batch out fees, monthly equipment warranty charges, transaction fees as well as authorization charges, equipment repair charges and many, many more.  All these fees will be a cost beyond the rate!  As explained in this article, all credit card processors have the same cost with interchange and must make a modest profit beyond that.  How a provider achieves that mark-up can sometimes be misleading and confusing.

Most business people are busy and just want the bottom line, but credit card processing is an area where they should work with a professional that will take the time to learn about the customer’s business to find the best plan and explain all of the charges.  Too many times I’ve seen business owners too busy to take the time to learn and the consequences have proved to be costly.

Merchants often ask the rate and go with what they perceive as being the cheapest plan, which ends up being the most expensive.  The reason is that the true professionals in the merchant payment solutions industry are consultants.   They will not just peddle a cheap rate because they realize that the rate is just one part of the value of the best solution, selected specifically for a merchant’s needs.  If an honest bank card representative is pressed for a rate without sufficient information, he would list every possible fee because using guess work, he has to account for every possible scenario, making him sound ridiculously expensive.

Meanwhile, the uneducated/dishonest peddler of merchant services doesn’t have this problem.  When put on the spot with the question “What’s your rate?” he’ll have a quick answer.  And yes, it’s low and simple.  It probably even comes with some promise of ‘guaranteed lowest rate’.  (Does it strike anyone else as odd that thousands of companies advertise a ‘lowest rate merchant account guarantee’?  How do they all have the lowest rate?)  So of course, that company seems the obvious choice.  What he’s not telling is all the rest that a conned merchant finds out later when all the deductions start coming out of the checking account or they have problems with the terminal or customer service.  That’s when the true cost is realized, and then it’s too late because they also learn they’re stuck in a contract for years.  A simple google search of merchant services ripoff or similar phrases will verify multitudes of merchants that attest to such experiences.

Low rate specialists are like shell game shufflers.  They don’t have lower ‘wholesale’ costs, lower operating expenses or a lower markup.  What they do provide is a good illusion of being cheaper, unless you can see behind the smoke and mirrors.  Does the average merchant doing a price comparison really understand the merchant services contract or have time to study it?  He needs to if he wants to see if the price is overall competitive and not a hook rate!  (Hint:  ALL merchant services contracts have fine print that allow for rate increases.  A good company and agent won’t raise the rate unless the card brands do.)   I personally have over seventeen years of experience deciphering rates and contracts.  It literally took me three years to be able to understand all of the loop holes and contracts in this credit card processing industry. The merchant is responsible for what is actually written on that contract, not what the agent says or omits.

A business owner does have resources available to learn more about merchant accounts and rates.  I’d suggest other articles in this blog site for starters.  Other than that, I’d highly recommend a book called Navigating Through the Risks of Credit Card Processing , by Bill Pirtle.  I’m proud to call Bill a friend and he’s done a terrific job of educating on this complex topic.

Now, assuming a merchant doesn’t have the time to study this book or become a bank card processing expert,  what question should he being asking when shopping for the best value on a merchant account?

A professional bankcard agent with integrity can provide a more competitive rate overall than a rate peddler.  They can find the ideal solution to keep the overall processing costs low as well as increase efficiency.  A great merchant payment professional will have the experience necessary to provide the guidance in selecting the right long-term solution that will keep the overall processing solution costs low as well as increase efficiency.

Why is a business more likely to get a better rate with a veteran, independent representative than a new bank card rep, a telemarketer or a company in-house sales person?  Because the veteran representative has established relationships that allow him to choose the most advantageous processing program.  Also, it’s an industry secret that the representative can choose to sell the equipment at a profit and increase the overall rate in whatever manner he can slip it by to make a quick buck.   The long-term agent will already have a book of business that provides his income and is more concerned about building long-term relationships than big profits that don’t last.

So how does a merchant find a professional merchant payment provider?   One indication is if a merchant is a Certified Payment Professional (CPP).  This is a voluntary designation that only the most dedicated and experienced agents will have earned.  The minimum qualifying standards as well as the testing is a screening process that less than a tenth of a percent of all agents have achieved.  It is a strong indication of integrity and experience in the field.  This can be checked at the national CPP Registry to see if an agent has such designation.

Another way to find out if the company and an agent are a good choice is through a quick google search.  (Hint:  Avoid the paid advertisements from searches.  These companies are paying approximately $25 every click through and those huge advertising fees ultimately are paid for by their customers.)  It’s incredible what can be found out about a company and a person online.  Does the individual/company show up on scam sites or favorable customer reviews?  Does the agent have a strong presence online or is it just a static website or nothing at all?  Using common sense, one review good or bad may not mean much, but when the overwhelming evidence is positive or negative one can usually reach the correct conclusion about a processing company.

When selecting the best credit card processing rate, a merchant can choose which route to base their decision upon.  Some will make a hasty choice for a promised ‘simple and low’ rate that sounds good but ends up costly.  Others will take the time and dedicate themselves to an education in bank card processing.  The path I would recommend is seeking a trustworthy experienced agent that can be relied upon to increase efficiency, minimize bankcard expenses and maximize profits!

For further questions, please feel free to call Robert McBeath, CPP of Cornerstone Business Solutions at 888-979-4731 or leave a message below.

No Ethics In Merchant Payment Processing?

As new parents, and each of us busy business owners, it’s interesting what passes for a date with my wife these days.  This morning it was an insurance ethics class, held an hour away.  As a financial advisor, my wife is required by the State of Illinois to attend a three hour class every two Salesmanyears to retain her insurance license.  It’s a very basic classic that is intended to teach insurance agents right from wrong.  I personally feel the class is common sense and anyone with moral fiber doesn’t need the class and if they don’t have a moral compass, they won’t learn it in a class room.  For heaven’s sakes, if that were the case, we could just send our politicians to a class for three hours and all our problems would be solved!

There were several points I found of interest in comparing my wife’s profession to my own in the merchant services industry.  The first being that although both industries are in the financial sector, her industry is highly regulated, while in my profession there is virtually no oversight.

What do I mean by that?  Well, in order to be in her field, there is a considerable amount of educational expense, time, regulated testing and numerous different designations required.  Renewals, reporting and oversight are a never ending part of her business.  Each company that she represents also has a compliance department that oversees every advertising piece as well as a suitability department that inspects every contract she writes.  In my field, there’s…nothing!  Absolutely no requirements or license to be an agent in my field means that a majority of the agents that are making calls to merchants in person and on the phone have inadequate training as well as no background checks!  These are agents that are quoting rates, making big promises and collecting sensitive information.  The only designation available in the payments field is completely voluntary and that is the Certified Payment Professional, accredited by the industry association, the Electronic Transaction Association.  To achieve the Certified Payment Professional (CPP) Designation, there is considerable requirements and regulated testing and ongoing licensing requirements.  I’m very proud to have been a part of the inaugural class when the program started nearly two years ago.  I am a member of an elite class of professionals numbering a total of twenty-two in the state of Illinois.  Out of tens of thousands of agents nationally, the number of CPP’s are less than 600!  (The registry can be checked online at

With no oversight and minimal self regulation, the standards that my wife sees in the insurance industry are non existent in my field.  That means that there is no oversight board, no fiduciary responsibility to the client, no fines or repercussions for unethical or incompetent work, no confidentiality policies of priviledged information, no background checks, etc.

In my years in the business I’ve seen numerous examples of these unlicensed merchant services representatives causing undue harm to merchants.  While a three hour ethics class probably wouldn’t eradicate such issues any more that it’s prevented unscrupulous financial advisors to slip through the cracks, I do believe that there should be some regulations to help protect unsuspecting merchants.  Until that day, I’ll say as I’ve always said, know who you’re doing business with!

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