Lesson 7: Software Tactics

Buyer Beware! Choosing the best software solution for your business is crucial to your success and software companies know how important this decision is to you. In this lesson, you will learn about the sneaky games the software companies are playing to obtain your merchant account.

Software can play a vital role in your business and your ability to accept credit cards.  Due to the nature of many software companies, they have integrated payments options built into the software.  Sometimes these companies will offer multiple payment choices to the customer allowing the customer to choose the payments solution that is best for their business. Some software companies, however take a page out of Slimy Sam’s playbook and force you into using their payment processing solution.  This gives you very little control over the fees and capabilities of accepting payments.


What To Look For

Intuit, for example, has found great success with its accounting software QuickBooks.  When QuickBooks was introduced to the market, Intuit offered tools to developers that would allow them to integrate their own payment solutions within the software interface.  As their customer base grew more dependent on the software, Intuit realized they were missing a large revenue opportunity by not acquiring their own customer’s merchant accounts.  In 2003, Intuit acquired a merchant account company by the name of Innovative Merchant Services.  Through this acquisition, Intuit was able to go after its entire customer base and offer its own merchant accounts to those users.

The profitability in those merchant accounts was so great that Intuit has since made it extremely difficult, if not impossible for the 3rd party payment solutions to remain as an option within the software.  In other words, today if you use an Intuit business software to run your business, you have almost no choice but to use the “QuickBooks Merchant Services” to accept credit cards.  The thought is that their business software is so great and the tradeoff too high to switch to an inferior product that you will stay with them in spite of the bad merchant processing rates.  Yes, this worked and Intuit has acquired thousands of merchant accounts through this strategy.  We would even speculate that the lion’s share of Intuit’s revenue is generated from its merchant account portfolio.

Since there is so much profit in merchant accounts, Intuit is not the only evil software genius to perform these kind of tactics.  POS software companies have been doing this for years.  The sales guy shows up in your store and performs a dog and pony show, wowing you with all of the great features of his POS solution.  It’s not until after you decide to buy from him that you realize that you just got suckered into using their “proprietary” payments solution.  As a result, you are now subject to their merchant account pricing tyranny.

Being forced to use a certain merchant account that is compatible with a certain software doesn’t necessarily mean that you should look for another software.  From the software company’s view, it can be a daunting task to integrate multiple payment options within a software and keeping those integrations up to date can take some serious devotion.  As a result, they simply decide to devote the effort to making one single payment integration and focus on ensuring it works wonderfully within the software.  However, some of these companies don’t offer this exclusive merchant account at a great rate because there is no competition for the merchant account.  Essentially they can use whatever sneaky pricing method they want and often will.  They may advertise a rate of 2% with low monthly fees and in reality actually be utilizing the enhanced bill back trick.  Of course the entire world isn’t an evil empire out to steal your money, there are several software companies that offer fair and competitive pricing on merchant accounts.  Just be sure to read the fine print!

Let Us Slice Your Fees!

Our exclusive FeeNinja Program provides you with a complete professional proposal with fair pricing and reasonable rates that you then take to your existing merchant account provider and ask them to match. It’s really that simple! You keep your existing merchant account exactly how it is but with a much better fee structure!

A Look At Intuit Merchants Services

Intuit uses a “one size fits all” pricing schema utilizing “tiered pricing” to bill its customers.  As you’ve learned in lesson 3, tiered pricing makes it possible for Intuit to conceal the actual interchange rate of the transactions.  Ultimately resulting in a huge disadvantage to the merchant.  Take a look at the fee structure:

Intuit Merchant Services

Setup Fee:

Monthly Fee:

Chargeback Fee:

Cancellation Fee:

Visa / MasterCard Qualified Rate:

Visa / MasterCard Non-Qualified Rate:





2.47% + $0.27

3.91% + $0.34

This is a typical tactic used and is especially prevalent when the merchant account is being provided by a software company. Complicating the true cost of a transaction even further, Intuit utilizes inconsistent buckets in it’s pricing schema.  Essentially they are stating one fee and charging a completely different fee.

In simple terms, they advertise a 2.47% rate on transactions when in reality most of the transactions will “not qualify” for that rate and be charged at the higher 3.91% +$0.34.

Ah yes, the old “bait and switch”.

The Good News!

If you are currently using a Point of Sale or business software that has not given you the freedom to choose your own merchant account provider, prepare to slice your fees!  Throughout this book we have exposed the pricing secrets and hidden fees that exist within the merchant processing industry.  It’s time to put this knowledge to work.

Take a look at your most recent merchant account statement, analyze all of the fees and determine the effective percentage rate that you are paying for all of credit card transactions.  Write down some notes, determine what kind of pricing method they are using.  Once you have a good grasp on what you are paying and what your fees are, give your merchant account provider a call.  Tell them that you would like them to review your current fee and rate structure.  If you are not already, ask them for Interchange Plus Pricing.