By Jaredd Galloway, ETA Certified Payments Professional
If you own a small business, chances are you process credit card payments. Accepting credit cards can increase your customers impulse buying. It gives consumers more buying power as the average person simply does not carry cash. As a business owner, cash is a liability. It can be miscounted, lost, or even stolen. While accepting card payments has many benefits, it is often seen as a burden to small business owners because of the fees associated to processing them. Here are three easy ways you can ensure you are paying less fees when accepting card payments:
1. Swipe Cards Whenever Possible
Card present transactions carry the lowest rates. The cardholder information is stored on the magnetic strip or chip on the credit card. The more data that is transmitted to the authorization network, the more likely it is you will receive a lower rate. Train your staff to not take shortcuts and swipe whenever they can. If you are a delivery service, look into mobile processing systems to provide your drivers. Mobile technology is readily available and affordable. The low costs associated to the mobile devices will pay for themselves in the long run with the lower processing fees.
2. Use a PIN pad – Accept Debit or Chip and PIN Transactions
A few years ago, the Durbin Amendment to the Frank-Dodd Consumer Protection Act created a cap for debit card processing rates that were significantly lower than previous years¹. These lower rates are available to debit cards issued by regulated banks whether they are processed with or without a PIN. However, there are still many smaller banks that issue debit cards that were not affected by the Durbin Amendment. Many processors will lump these types of cards in with traditional credit card rates if they are not processed with a PIN, which can be a significantly higher rate. In addition, by accepting PIN based transactions, you could be greatly reducing your exposure to chargebacks and fraud and the fees associated to them.
3. Make Sure Your Account is Setup Properly with Your Provider
Believe it or not, this a very common problem with small business merchant accounts. Often the owners are focused on the base rates. Many are not aware that there are special pricing programs available to different business types. For example, a restaurant has different processing interchange rates than a hotel does. By finding a provider who differentiates business types, you can be assured to get better rates. Or worse, you may even be paying higher rates for being setup incorrectly. For example, if a small business were to accept write in tips on their receipts, then performs the tip adjustments but they are setup as the wrong business type, all of their transactions can be surcharged!
Accepting credit card payments can be confusing, expensive and stressful if not done correctly. As a small business, it is important to utilize equipment that can help save you money and give you peace of mind. Try looking into more dynamic but affordable equipment to help save you money in the long run. Some great options have been developed by Clover, a First Data company. Clover Station, Clover Mini and Clover Go are fantastic systems that will enable your business to accept Credit, Debit, Chip & PIN or mobile payments. The Clover systems integrate and are adaptable to every business type. You can see them all here. By having the correct equipment and using a payment provider that has a strong grasp on pricing strategies, you can be sure to always process transactions safely, securely and with the lowest fees! Make your merchant account profitable again by following these three simple steps.
About the Author:
Jaredd Galloway is an Electronic Transaction Association Certified Payments Professional overseeing and providing merchant accounts for tens of thousands of small business owners since 2002.
¹Chen, Tim What the Durbin Amendment Means for You U.S. News & World Report 12 July 2011. Retrieved on 08 June 2016