Credit card transactions are starting to become more popular especially since companies are promoting cashless payments. This means that people are encouraged to have cards and loadable accounts so that the use of cash will be avoided.
Although this trend is good for people who don’t want to carry huge amounts of cash every day, it might not be as good for small businesses that have to pay payment fees every time a card is swiped in the processor.
Nonetheless, there are still ways to save on the payment fees. Here are four tips to do so:
Processors are the devices where the card is swiped or the card number is inputted. The way payment fees work is that for every credit card sale, the credit card company gets a cut from the sale itself. This serves as your payment for the services they provided.
But what is crucial here is that aside from the payment taken by the credit card company, different processors have different rates. Yes, you read that right. Processors have different rates and types of services so before you commit to a processor and its company, you might want to look around for the best deals. Avoid falling into the trap of buying a processor that is cheap at first but has a lot of extra charges per transaction.
For a lot of small businesses, they aim to get the cheapest processor providing an okay service. However, what they don’t know is that sometimes the processing company changes the rate when the transactions are coming in.
The best way to avoid this is to always check your merchant account statement and inquire about the breakdown of the fees. This is to check that you understand what you are paying for and that the company is complying with your contract of the services included in your payments.
The key here is transparency. As a small business, you should demand full transparency of all your expenses and the services you are asked to pay.
Long-term contracts are a big no-no especially for small businesses because they have expensive termination fees. If your company is not that established yet, you wouldn’t want a termination fee dangling in front of you. What you can do is look for short-term contracts where you get the services that your company needs.
The rule in processors is that the higher the risk of fraud or faulty transactions, the higher the payment. Manually inputting the numbers leaves a lot of space for human error and at the same time, has less protection and security from fraudulent cards. To save on your payment fees, swipe as much as you can so that cards will go through security before being transacted.
Credit card transactions cannot be avoided since credit card use increases every year. However, you can always manage the payment fees that come with the credit card processors to help save money for your small business.