Your business’ operating expenses are crucial, and the one place where you can find savings is your merchant account fees. Here are a few tips that will help you save about 30%.
Find a rep whom you can trust
Merchant services reps should be reputable, and it’s worth noting that this reputation comes from decades of being in the business and it’s not something that you can achieve overnight. Make sure to find a rep whom you can totally trust and who has enough experience and the ability to explain things as straightforward as possible.
Understanding pricing models
It’s important to learn that there are three standard pricing models in credit card processing. These include the flat rate, tiered pricing, and interchange plus aka cost plus-pricing.
PayPal (News - Alert) and Square processors made flat-rate pricing famous, and this is the best option for merchants who are processing small monthly volumes. Tiered pricing features three levels that are called qualifies, mid-qualified and non-qualified tiers. Flat-rate pricing is easy to understand, but it might cost you more.
Your rep should know best the differences between these three and explain them to you so that you can understand them perfectly.
Asking the right questions
There can be lots of fees associated with a merchant account, so you will have to make sure that you are asking the right question when you’re negotiating with a new provider. These should involve annual fees, minimum penalty, monthly service fees, statement fee, batch fee, the American Express transaction fee, setup fee, application fee, PCI (News - Alert) compliance fee, and more.
Finding out the kind of customer service that’s available
Most reputable processors will provide 24/7 customer and tech support for no additional costs. So, you better make sure that your rep will be available to help you whenever you need it because time is money.
Using updated software and hardware
Especially if you plan to take swiped credit-card transactions via a credit-card terminal, you will need to be up to date with EMV equipment. EMV stands for EuroPay MasterCard (News - Alert) Visa. It’s useful to know that some providers are offering this for free. If there’s a free equipment option in exchange for a reasonable contract term, you should ask the costs. It’s recommended not to lease because this will always cost too much money.
Understanding existing contract terms
This is a crucial thing when dealing with merchant services. If you find out that your current processor has been over-charging you for a while, you might have another processor in mind that you can trust more. We recommend that you ask the latter if they are able to help you pay out your early termination fee. There are a lot of times when they will split it if you’re ready to sign a contract with the new processor so that they can be sure they will eventually get that investment back.
The credit card processing industry can seem very complicated, but with the right person advocating on your behalf who understands the business, success will be all yours.
