You don’t see a whole lot of actual cash being thrown around for transactions in the business world today. Your company is likely to see about two-thirds, if not more of its transactions conducted through the use of credit cards.
Your business is being charged a processing fee for every credit card transaction they complete. Without having the proper merchant service provider, that expense is not always in the best interest of your business.
Merchant service companies have a series of card processing pricing models associated with their services. Flat rate pricing is what it says it is, and is negotiable. Tiered pricing is a bundled system, featuring qualified, mid-qualified, and non-qualified tiers. The system usually involves higher costs for your business.
The pricing model generally considered the most fair is known as interchange plus. These are the fees that are set ahead of time by credit card associations Discover, Mastercard, and Visa. A fixed markup charge is applied directly to interchange plus costs.
Markup fees can be the worst. If you don’t ask the right questions of your merchant services provider, your business might see terminal fees, Payment Card Industry fees, annual fees, early cancellation fees, IRS reporting fees, and possibly a whole lot more. Providers need some of these charges, while others can be negotiated, or even eliminated.
You can start saving money from the beginning if you ask a potential provider about their policy on debiting fees, setup fees, monthly service fees, and their plan for tech support. And your business will also need to ask about fees for reprogramming your equipment.
That came into play on Oct. 1 2015, when merchants were expected to have EMV, or EuroPay MasterCard Visa equipment in place to accept chip service technology. Your services provider should have a solution for EMV.
EMV refers to credit cards equipped with computer chips. Customers will now dip their cards into a terminal instead of swiping them. The new system is expected to cut down on credit card fraud in stores because the chip will create a code for each purchase that can’t be used again.
And speaking of equipment, it would be more cost effective for your business to buy your own rather than lease. We recommend that you better shop around to compare the cost of leasing credit card processing equipment against purchasing your own. This is more that can be negotiated with your merchant services provider.
Also, if your expenses are still too high, don’t forget to ask your provider to review your rates and try to lower them. At least see that they are fixed so your service company can’t raise them.
If you do your homework and research pricing models for merchant service companies, you can come up with a reputable provider who will minimize your costs and streamline your business. Here at TechStarters, we can improve your e-commerce website by offering credit card processing, gift cards, E-Commerce and Quickbooks integration, inventory tracking, and much more, according to what suits your business needs.
Choosing the right merchant services provider will find you with fewer markups, and transfer those fees to your company’s bottom line. That’s definitely in your best interest.