About five years ago, I signed up with a reseller to accept credit cards for my vacation rentals. I was new and at that time merchant account providers still weren’t real up to speed on the whole notion of accepting credit cards over the Internet. Anyways, I signed up, paid the account setup fees and soon I was accepting credit cards over the phone using authorize.net.

The merchant account provider was First American Payment Systems. They charged me a variety of monthly fees including batch header fees, statement fees, monthly minimum fees, per transaction fees and a 2.75 – 3.00 discount rate.. Additionally they took the discount rate first and then deposited the remainder.

This was all fine until earlier this year when I happened upon another merchant account provider (e-onlinedata)offering a great deal:

* NO Application Fees
* NO Annual Fees
* NO Address Verification (AVS) Fees
* NO Leasing
* NO Termination Penalties
* NO Batch Header Fees
* 2.29% VISA/MasterCard Qualified Discount Rate
* $0.30 per Transaction
* $10.00 Monthly Service Fee (includes Monthly Statement)
* $25.00 Monthly Processing Minimum
* Toll Free 24/7 Tech Support and daily Customer Service Support

I happened to be in the market for another merchant account for VacationRentalDirect.com and thought I would give it a shot. The staff at e-onlinedata was great to work with and the account was setup in a matter of 1-2 days. The monthly fees were substantially lower, there were no application fees, the discount rate was over a 1/2 percentage point lower, which if you accept CC’s totaling $250,000 per year, that’s a $1250 savings!
And they deposited the full charge and then took the discount fee at the end of the month. That was nice for accounting purposes.

After a few months, I decided to drop First American Payment Systems, even though I could have called and asked for an account review, there is no way they would match the deal above. Lo and behold, after five years, this company pulls out a little gem out of their hat. It turns out that when I signed up, in the fine print, they had buried that my contract term was for one year with an automatic renewal each year. If I cancel early, there is $250 account cancellation fee!!

Who does that? Who treats their customers like that these days? My account expire on 2/3/2008. Even though I would have saved $40.00 by not canceling immediately and instead just cancel the auto renewal, I wanted nothing to do with a company that disrespects their customers like that. I faxed them a letter telling that I would tell as many people as possible about their activities and to cancel my account immediately. We’ll see if they go ahead and charge me the $250.00. I suspect they will.

So pay close attention to your merchant account agreement, make sure your contract is an at-will contract with no termination fee!!

If you are interested in establishing a merchant account with the provider I chose, I am confidant you won’t find a better deal, anywhere: