Beyond the Promise of “Low Rates”

Search online for “merchant services” and you’ll find thousands of companies competing for your business with one common message: “We offer the lowest rates.”

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But behind those thousands of companies is a much smaller group of payment networks responsible for the two essential functions that make card transactions possible:

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Authorization — approving or declining a transaction.

Settlement — moving the funds from the customer’s account into your business account.

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Many providers you encounter are not the companies actually processing your payments. They are sales organizations built around relationships with the underlying payment networks and platforms.

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Some of the major processing networks (acquirers) include: Fiserv (formerly First Data), Chase Paymentech, Elavon, Global Payments, TSYS, Adyen, and Worldpay. 

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​The way these companies generate revenue varies based on their business model, pricing structure, and the specific merchant account.

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Here is the important distinction:

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Merchant service providers often compete by promoting their ability to “lower your rate.” But a rate alone tells you very little about the true cost of accepting payments.

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After all, “rate” is no more a complete measurement of payment processing than pounds are a measurement of height.

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So, all things being equal, the true measurement is markup.

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Or, as SōBōNet has taught its clients since 2017, it comes down to one simple question:

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“How much money are you making on my business?”

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That is the question that reveals the true relationship between a merchant and their provider.

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There are other important questions that deserve to be asked:

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• What processing network will my transactions actually run through?

• What are you doing to improve my payment security and protect my business?

• What value, services, and support am I receiving for the fees I pay each month?

 

Too often, businesses focus only on the lowest promised price and overlook the larger picture: reliability, transparency, security, and long-term value.

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Because when it comes to something as important as your payment system, the question is not simply:

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“Who has the lowest rate?”

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The better question is:

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“Who has earned the right to handle my business?”

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After all, how comfortable would you be crossing a bridge built by the lowest bidder?