Accepting credit cards today has become a little more complex that the original method merchants used when they were first issued. Long gone are the flatbed credit card imprinters and trips to the bank to turn in the credit card draft. Today, we have many transaction types including card-present, card-not-present, mobile payments, digital wallets, and shopping cart payments.
As both retail customers and business customers are using credit cards for almost every single purchase, merchants have been forced to swallow more and more fees as the cost of doing business. Most merchants just lie down and let the MasterCard and Visa steamrollers just barrel over them. While credit cards were imprinted with a hand-operated machine starting in the 60s and 70s, the fact is that there have been more technology changes in the past ten years than there have been since 1958 when American Express and Visa (then BankAmeriCard) launched. Here are five ways that most businesses can reduce their merchant fees and process cards faster and safer in this time of change.
#1. Do you have sales orders or invoices?
If you are doing business with other businesses, you likely have some type of accounting software that you use to create invoices and collect and apply payments. If your main business is selling to retail customers, you probably have a Point-of-Sale system. Both types of systems usually come with built-in credit card processing applications known as integrated payments processing. This feature is intended to save time since you can apply card payments to a specific sale. If your current procedure for accepting credit cards requires that you enter payments into your system on a manual basis, you really need to invest in a system that has integrated payments. This will save you a lot of time, and as we all know, time is money.
#2. Don’t have a store? Use a virtual gateway.
If you don’t have a storefront or you work in a place like a beauty salon where you process your own credit card payments, a virtual gateway is best thing for your mobile business. Don’t lose sales out in the field simply because you can’t take a credit card. With a virtual gateway, you can accept payments wherever you have internet access. You can monitor your transactions and payments in real-time with a virtual gateway, and you can also create reports based on your transactions that can help you keep track of your money.
#3. Qualify corporate credit cards correctly.
Many merchants who transact business-to-business (B2B) transactions pay needless credit card processing fees simply because business, corporate, and government credit or purchasing cards (also known as P-cards) come up “non-qualified” or “standard” or showing some other downgrade on their processing statement. Make sure your credit card processor understands your business and can help you better qualify these specific types of credit cards, and you’ll end up paying less.
#4. By now, you should be EMV compliant.
EMV cards or chipped cards are equipped with special computer chips that communicate with corresponding card readers, adding an extra layer of security to card-present transactions. In October 2015, merchants became solely liable for fraudulent transactions committed with EMV credit cards used on a non-EMV card reader. Banks did their part by supplying customers with chip-equipped payment cards, but are you doing yours? If you are still not using a chip reader for your transactions, it is time to upgrade. Special EMV terminals (and even mobile EMV readers for virtual gateways) cost about as much as regular credit card terminals. They will cost you about $200-$300.
#5. What’s your pricing structure like?
When it comes to the pricing of your transaction fees, the more detail you are provided with, the better. You should be able to identify what an individual transaction will cost you. Using a flat-rate plan such as Square might seem convenient, but why would you want to pay 3.5% of your transaction price when it only cost your processor 1.67% to process? Are you paying a per-transaction fee? Is there a monthly statement fee? Know what your effective processing rate is for budgeting purposes. Your “effective rate” is your total amount spent on credit card processing fees divided into the total dollars amount of the transactions you submitted. If you find your effective rate is higher than 4.0%, you are likely paying way too much. Know exactly what you are paying for. Contact Chosen Payments at 855-4-CHOSEN, and we can make sure you keep as much of your money as possible