Buyer Beware:

The Truth About “FREE” Wireless Credit Card Machines

by Michael DiGiovanni, President, 1st National Processing
September 2007

Increased competition in the credit card merchant services industry has prompted many of the vendors to resort to unfair, crooked and intentionally misleading marketing and sales tactics in order trick merchants into signing with their companies. All too many unsuspecting merchants are falling victim to these dishonest companies while getting the false impression that they are getting a fair, unbeatable, and too good to be true, deal. Unfortunately, the “Free Wireless Credit Card Machine” deal is too good to be true and any merchant that sets up this account is going to get burned. The fact remains that nothing in life is free, especially a wireless credit card machine that costs all merchant service companies in excess of $600.00 to purchase. There is simply not enough monthly residual income generated off merchant accounts to justify these merchant service providers taking a six to seven hundred up front loss. So why do they do it? They do it because the sales reps are only disclosing about one third of the fees and commitments applicable to the account. The naked eye will see a low up-front set-up fee, a seemingly competitive qualified discount rate and transaction fee, and a fairly average monthly service fee. What these shady companies do not disclose is an extremely long-term commitment with a severe early termination fee, a very high monthly minimum requirement, excessive mid qualified fees and non-qualified fees, and additional wireless transaction fees. The truth is that a merchant account with this type of set-up will generate about ten times the profit than a standard account and the merchant will actually end up paying for the terminal several times over within the 1^st year, but the merchant will never own the machine. To top that off the companies are protected from the merchant skipping with their equipment because they have them locked into a long term 3-5 year contract with a cancellation fee ranging from $750-$2000. So the risk has been mitigated entirely and the deceptive tactics of using the word “FREE” is successfully generating an enormous amount of business. As a result, an extremely large percentage of merchant service companies are in a panic because of their lost market share and are therefore mimicking this deal, sacrificing their honesty and their integrity, taking unfair advantage of unsuspecting merchants all over the United States and blackening the eye of the entire industry.

We at 1^st National pride ourselves on honesty, full disclosure and superior service and support. We have so much more to offer to a merchant than simply low rates and upfront fees, although ours are the most competitive in the industry. Forty percent of our business comes from referrals of customers who have found that our word is gold and our service is second to none. We would never consider sacrificing our impeccable reputation in a crooked attempt to generate more business. To compete, we do offer the same “Free” credit card machine deal but any merchant who inquires gets a detailed full disclosure list of every single fee and detail that would apply to that type of merchant account. They also receive our expert opinion and explanation of why it is simply not a smart business decision to opt for the “Free Wireless Credit Card Machine”.

We are appalled by the practices of these other companies and what it has done to our industry. Our sales reps now have to spend significant amounts of time explaining to perspective merchants that the companies saying “Free, Free, Free” are not being honest. The purpose of this newsletter is to educate perspective merchants in an attempt to spread the word throughout the industry and to finally put an end to these ridiculous business practices that are all too common. On our website, www.1nbcard.com/artisan.html we have listed three sample deals. The 1^st is the typical “Free Wireless Credit Card Machine” deal, which is crooked and only discloses about 1/3 of the information about the account. The second example is a full disclosure of the same “Free Wireless Credit Card Machine” deal pointing out all of the fees that were hidden in example one. And the 3^rd example is a deal in which the merchant buys a credit card machine for an up-front fee of $619, owns the machine, and saves a significant amount of money in the long run because they are getting the best possible rates and monthly fees in the industry. We seriously encourage all merchants to view this information because it clearly displays in dollars how badly you will be ripped off if you fall victim to the “Free Wireless Credit Card Machine” scam.

We sincerely hope this newsletter helps merchants to make educated decisions and to avoid getting burned when choosing a merchant service provider. For more information on this or any other merchant service related question please call us Toll Free: 866-499-15722 or visit our website at http://www.1nbcard.com/artisan.html.