Most retailers are generally under the impression that the exorbitant cost of credit card processing and merchant accounts are unavoidable. However, one needs to realize that merchant account/service costs could be reduced provided you possess the perfect market intelligence.
When you begin using a merchant account service, it becomes essential for you to pay multiple service fees or charges. You may have to pay the charges as per the services you are availing and that may include Monthly Minimum, Address Verification Fee, Gateway Fee, Transaction Fee, Statement Fee, Chargeback Fee, and also, Cancellation Fee. However, you could reduce these merchant account costs effectively if you are market savvy.
Ways of Reducing Merchant Account Costs in a Nutshell
You can effectively reduce merchant service costs by:
- Recommending efficiencies and auditing internal processes
- Assessing present pricing programs as well as by negotiating enhanced rates based on volume, industry and also, the processing methods.
- Tweaking the current set-up for achieving the unparalleled industry rates
- Recommending POS (Point of Sale) system upgrades
- Reevaluating credit card transactional ways and approaches
- Boosting transactional efficiency
- Minimizing and eliminating processing risk for reducing the potential
Hiring Experts
You may hire experts to reduce merchant service costs and negotiate merchant account contracts. The professionals make it a point to ensure that your merchant account contracts are written with a bias toward you. The credit card processes are usually aligned by experts with your firm’s requirements for ensuring transactional expenses are precise.
You could contact a fully-conversant team of merchant account processing as well as sourcing professionals. These thorough professionals are well versed in interpretation of merchant account contracts and agreements and also, carrying on renegotiation especially relating to the precise structures of your credit card transactions. This may include:
- Bill Backs
- Card Association Fees
- Card Category analyses
- Chargeback fees
- Customer Service fees
- Early Termination fees
- Interchange Plus pricing
- Monthly minimum fees
- Nuisance fees
- PCI Compliance processes and charges/fees
- Tier pricing
Research is Useful
You must do ample research and find out the existing best price in the market. This could be pretty useful in reducing your card fees. You must find out what the top rates are before you begin negotiating. You could contact your colleagues and find out the amount they are paying.
Go Through Customer Reviews
Quick and thorough Google searches are a great idea as they help you build a shortlist of companies you would like to sign with. There should be ample number of reviews available on personal blogs or public forums too which would help you make the decision.
Keep Tabs on the Interchange Rates
Interchange rates are charged by the original credit card companies like Visa and MasterCard to the credit card processors. It is important for you to check that the differential passed to you is the same as the differential specified in these rates. Some card processors may try to impose more on some rates, but you should set the record straight. Between MasterCard and Visa, the interchange differential is 1%. You may consult your salesperson if you are unable to locate the interchange rate online.
Study the Charges made to Your Account
Pull out statements issued for your account over the last six months and sift through them for any irregularities. If any do jump out at you, confront your processor. While some fees like charge-back fees or downgrade fees may be intentional hidden fees, some may have genuine reasons, so you should always consult the concerned authority to understand what is afoot. To avoid downgrade fees, you could also switch over to an auto-settle facility.
Delay Payments
A strategy which has been adopted by several e-commerce giants as well as independent agencies is to take the payment only after the item has been shipped and received. This allows the firm’s card processor to be exempt from any liabilities, should the company experience a sudden fall or legal issues in the period between order and delivery.
Segregate Terminal Costs
You could always hire credit terminals somewhere else at less cost. What matters when hiring third parties is that you can sync these new renewal dates with the actual processing renewal date for your card. There are several sites which would be happy to give you a quote.
from http://monalisaofblogging.com/effective-tricks-to-reduce-merchant-service-costs
No comments:
Post a Comment