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38 August 2015 | beautystorebusiness.com 0.50% plus $0.04, while it may quote a business with a high sale amount a markup of 1% plus $0.15." In any event, cost-plus pricing forms the basis for legitimate comparisons between competing merchant account quotes. "Cost-plus pricing is becoming more and more common for smaller merchants," says Rianda. Cost-plus pricing can save money over traditional pricing mod- els and should always be a retailer's preference over the old tiered pricing model. As attractive as it is, cost-plus pricing adds further complexity when a retailer attempts to compare rival merchant account quotes. You will need to invest some time in study- ing competing contracts to assess their relative merits. An easier way to make sure competing quotes are working with equivalent terms is to use one of the online merchant account marketplaces. See "Shop the Marketplace" above. SERVICE COUNTS While landing a merchant account contract with favorable pricing is important, it is not the only consideration. "You need to consider the quality of an ISO's ser- vice," points out Rianda. "For example, if one of your customers is standing at check out and suddenly your process- ing equipment goes down, you want to be able to immediately call some- one at the ISO to get the machine up and running quickly." One way to assess the quality of a processor's service is to ask for references, then call them. Ask questions such as these: Is someone available 24 hours a day seven days a week? Does someone at the ISO respond promptly to inquiries? Does the organi- zation help you if your equipment fails? Also ask current customers about the qual- ity of the ISO's transaction reports. These should be as detailed as possible. "Report- ing is probably the most important quality of an ISO after price," says Shatz. "Once you have negotiated good pricing, after all, you want to make sure you are getting it. The greater the granularity of report- ing the better. This is where cost-plus pricing comes into play, and it becomes more important as you get bigger." Reports should include a detailed list of what you were charged for each sales transaction. These charges take three forms. The first is the interchange rate (a percentage of sale plus a flat fee), paid to the bank that issues the credit card to the consumer. The second is the assessment (a percentage of sale) made to the MasterCard and Visa card associations. Third is the processor fee (usually a percentage of sale plus a Shop the Marketplace Comparing rival merchant account quotes can be confusing. One Independent Sales Organization (ISO) may present an attractively low quote only because its monthly bills are packed with surprise fees. Another lowballing ISO may require a lengthy contract and a punitive early cancellation fee. One solution is to spend the time studying rival contracts. Another is to take advantage of online marketplaces such as CardFellow.com, designed to level the playing field by standardizing ISO offers so merchant account clients can compare quotes accurately. "Processors wanting to compete in our marketplace must sign an agreement outlining what they must do," says CardFellow (cardfellow.com) president Ben Dwyer. All quotes are standardized with the same terms in the fine print. For example, no participating processor can charge a cancellation fee of any kind. "We also require true pass through pricing," says Dwyer. "The ISO must fully disclose its costs." Any business wanting to get some merchant account quotes can sign up free on the CardFellow website, key in some basic information and in a matter of seconds receive offers from half a dozen processors. "We share no information with processors beyond the applicant's first name," says Dwyer. "As a result the applicant will receive no phone calls or emails from processors." (CardFellow makes its money on a commission fee charged each processor selected by a merchant.) Booth #14087