Most business owners loathe payment processing fees. They logically know that paying for merchant services is no different than their customers paying them for services. Yet, after investing a lot of time and money in starting or building a business, the seemingly high cost of credit card equipment and year-to-year increase in fees tends to make every business owner cringe. Some owners ask themselves, “Is it even worth it for me to take anything other than cash?”
The most important point to keep in mind is that you do not have to pay outrageously high processing costs to accept other forms of payment. The most common reason that some merchants experience high costs is because they fail to treat payment processing the same way they treat other services that are the “cost of doing business” like electric and internet utilities. Consider these four tips:
Don’t Lease Credit Card Machines
If you purchased your computers and office equipment, you likely did so because you understand that purchases are typically cheaper than leases in the long run. Whether you need a credit card machine and PIN pad or a POS system, you can save hundreds of dollars by buying your equipment. Although lease agreement low monthly payments look great on paper, you can save more money over the same time frame by comparing equipment pricing online and making purchases as needed. Some companies will even give you a discount on your purchases if you ship your old equipment to them.
Negotiate a New Deal
If you’ve fought with a internet service provider over your billing charges to negotiate lower prices, then you know that negotiating and renegotiating down the line is critical to cost-cutting. It doesn’t matter if you already have a merchant account or you’re starting a new business either. Always do everything you can to negotiate the best deal possible. Research options before you call, make certain that you have offers from several processors and then contact the one that you like the most to discuss credit card processing fees.
Accept More Payment Methods
It might sound crazy to take on even more fees by processing other forms of payment like PIN and signature debit cards, checks and gift cards, but offering more payment options both saves you money and increases your revenues over time. In fact, this concept is similar to paying for apps to drive traffic to a business website and improve productivity. Accepting PIN based debit usually costs less to process when compared to credit cards and signature-based debit. Offering additional payment options also increases the likelihood that someone who only wants to pay by check, for example, won’t spend the money they planned to spend with you elsewhere. Gift cards always bring more traffic and potential repeat customers through the door. As a result, even though you pay a small fee to process each transaction, gift cards cut promotional and marketing costs.
Educate Yourself About Rates
Of course, before you negotiate any deal for credit card processing services or a merchant account, you should do everything possible to learn about the equipment and rates that would likely work best with your specific business. For example, buffet-style restaurant owners often prefer desktop POS systems that give them more customization options while artists who sell their creations at craft shows often prefer wireless credit card machines that allow them more mobility. You also need to pay close attention to your average ticket amount. There are several types of rate structures and some save small ticket merchants more while others are better for large ticket merchants. Lastly, take the time to learn the savings differences between flat and variable, bundled and tiered rates.
At Host Merchant Services, we understand that you want the best possible rates. Unlike many other processors, we do everything we can to make that happen by providing honest, superior service every time. For more tips on saving money on your payment processing or to discuss our rates, contact one of our experienced merchant services representatives today.