by Ben Dwyer Credit card processing consultants offer to negotiate with your credit card processor to lower your costs. But is it the best way to save your business money?
It may be tempting to hire a credit card processing consultant in order to lower your processing fees. But consultants are often expensive and cut into your savings. Add to that the fact that you can get the benefits of a consultant through CardFellow for free, and a credit card processing consultant won’t seem like such a great option.
Types of Consultants
There are generally two types of credit card processing consultants. The first type, which we refer to as unaffiliated, is a consultant that doesn’t work with a specific processor; instead, they negotiate lower credit card processing fees with a business’s current processor.
The second type of consultant, which we refer to as affiliated, attempts to lower a business’s processing costs by switching them to a new credit card processor.
Unaffiliated Credit Card Processing Consultant
Unaffiliated credit card processing consultants work with your current credit card processor on your behalf. They attempt to secure lower costs by using knowledge of the industry to take on negotiations that you may not have the knowledge (or the time) to do yourself.
These consultants generate income by charging their clients a percentage of the savings that they’re able to produce on a monthly basis for a specified contract term. For example, an unaffiliated consultant with a rate of 50% will keep half of the savings they generate for the length of their client’s contract term, which is typically 12-24 months.
Unaffiliated consultants can offer unbiased guidance since they’re not affiliated with particular processors. However, their independence comes with a hefty price tag. The cost is often excessive and disproportionate when compared with other options that produce virtually the same amount of savings.
Unaffiliated consultants are generally only interested in working with high-volume clients. In particular, they seek businesses that are grossly overpaying for their current processing services. After all, the more savings the consultant can secure, the more they get paid.
In addition to negotiating lower rates and fees with a client’s current processor, unaffiliated consultants will also monitor a client’s statements and processing behavior in order to optimize the client’s interchange expenses. That’s beneficial as it helps ensure that you’re paying as little as possible when it comes to unavoidable processing fees in addition to paying less in processor markups.
For businesses that can’t switch processors right away (due to contracts with high liquidates damages, for example) this can be a stopgap option to lower costs. However, in most cases it’s still worth switching to a more competitive processing solution as soon as feasible.
Affiliated Credit Card Processing Consultant
Affiliated credit card processing consultants generate income through a residual commission. The credit card processors to which they refer clients pay the commission. They may also charge clients a fee for their services.
Affiliated consultants are inherently biased toward the processors on which their income depends. While this bias may seem counter-productive, it allows affiliated consultants to offer their specialized guidance at a much lower cost than unaffiliated consultants.
Given their direct relationship with one or more credit card processors; there’s virtually no difference between an affiliated consultant and an independent merchant account sales agent. In fact, affiliated consultants are often just that — merchant account sales representatives that refer to themselves as consultants strictly for marketing purposes.
Affiliated consultants are generally less experienced and offer a more superficial service than their unaffiliated counterparts. The bulk of their service is over once they switch a client to a credit card processor. They generally don’t provide the ongoing analysis that the income of an unaffiliated consultant depends upon.
CardFellow: The Best of Both Worlds
The ideal solution to lower processing expenses is to avoid credit card processing consultants altogether and instead to seek a processor that offers competitive interchange plus pricing and ongoing consultative support. Of course, doing so is easier said than done — that is until CardFellow came along.
Our goal at CardFellow is to secure the most competitive interchange plus merchant account for your business’s needs. After that, we remain a point of contact and support to ensure that your relationship with your new processors goes smoothly, your rates stay consistent and your interchange fees are as low as possible each month. You’ll get the benefit of a dedicated consultant without the hefty price tag eating into your monthly savings. Check out our introduction video below:
By finding a processor through CardFellow, you are ensuring that your business will start with the lowest rates possible. Even better, those rates will remain consistent over time. Along with your new processor, we remain available to help you optimize your business’s interchange expenses, ensure that your business is PCI DSS compliant, and assist with questions and general support.
Unlike unaffiliated consultants, you don’t have to pay anything to take advantage of the great service that we offer. We also remain an unbiased source of support both before and after you select a processor.
So CardFellow isn’t a consultant?
Nope! CardFellow is not a consultant – rather, we run a free marketplace for processors to compete for business. We do not make money based on the savings you get when choosing a processor through our service. All of the savings are yours.
We’re able to keep this great service free for you because we receive a small commission from processors when you select their quote. The commission we receive is only a fraction of the commission consultants collect. That allows the quotes you receive through CardFellow to be as competitive as possible.
However, CardFellow is always happy to provide expert advice on how to secure the most competitive processing – but we’ll walk you through it and explain our reasoning so you can feel confident that our suggestions are made with your best interest in mind.
It’s free to sign up for and use CardFellow, and there’s no obligation to accept a quote. The only investment that you’ll have to make is the three minutes that it takes to create a free account.
