Wednesday, August 19, 2015, AM | Leave Comment
When you are running a large business, credit card processing may seem trivial. But if you can maintain due diligence, the health of your business will remain good for a long term.
Now, here are some ways following which you can save from credit card processing:
Select Credit Card Processor
You should select your credit card processor wisely. For instance, you may be running a restaurant.
Now, each of your customers may use their credit cards at the time of billing. The swiping transaction gets relayed with an intermediary and the funds switch from credit card company to bank account of merchant.
In this case, middlemen charge a fee of 2% to 5% per sale. Instead, if you allow your bank to handle transactions, you may carry on with transactions by paying a conveyance fee.
While you are choosing your processor, the fee is not the only deciding factor; you should also consider service and speed.
Time, which is actually taken for earning customer’s money, can be termed as lag time. Generally lag time can be minimum 1 day to maximum of 5 days.
Cheap credit card processing rates can only be achievable if you obtain efficient processors.
Some processors may try to earn from the reimbursement process of credit card companies. The faster you obtain the service, it is better. Shorter lag time can save your money.
Generally processing fee of 2% rate is pretty good for both sides. Sometimes, it can be wiser to use third parties as they claim cheaper rates from banks.
Phone orders may have higher processing fees like 5% to 8%, when the buyer is actually typing the numbers in the phone instead of swiping cards.
The processor requires paying fees for Visa and Master cards where 1.65% is the normal rate. But, if processor offers very low rates like 1%, there can be something dubious.
It is quite possible that the company is losing money by decreasing fees and may suddenly increase it in the midway to regain the profit margin. Thus, you need to be careful.
Equipment is generally used at point of sale. The equipment or credit card processing system can come within $300 to $800.
Some systems also come with advanced software. The processing companies may offer equipment as part of a package without any extra cost.
Merchants may require a separate internet connection or telephone line for connecting to processors.
Besides processing fees, you are required to consider termination fees also. Generally the contracts are one to three years, and if you want to come out early, you need to pay termination fees by following rules.
If your contract is confusing and not clear to you, you may ask for monthly statements by itemizing transactions and related fees.
Instead of deducting fees at every point of transaction, the processors require collecting them and deduct cumulative amount after each month.
This process will keep a little extra cash in your hand. Besides, gift certificate processing may also cost 25 to 50 percent of every transaction.
Though all processors will not offer extras, but it is always worth asking for this offer.
If you really want to save on credit card processing, you are required to have basic knowledge about processing activities.
When you are not confident enough, you may take help from professional experts who deal with credit card processing activities.
No matter how much transparent, you may always seek professional help if you have the slightest doubt about your contract.
Just check which option is more suitable for you, the bank or third party; and then move accordingly.
Derek Peterson is a well known credit card processing expert. In this article he suggests the ways to obtain cheap credit card processing rates and money saving tips.