One of the questions we get most frequently is "How do I keep my merchant fees low?" Since this can be a pretty complicated industry, we have compiled a short list of things you can do to help keep your rates down. For a more detailed description of the merchant services industry, CLICK HERE TO DOWNLOAD OUR E-BOOK
Step 1: Swipe Cards Whenever Possible
Most of the time, a swiped transaction will be less expensive than one that is hand-keyed. This is not true in all cases but it is a pretty safe bet that you will pay less if you swipe the card.
I recommend getting a countertop terminal or point of sale system if you have a storefront, and a mobile device if you are out and about.
We provide free countertop terminals, low cost point of sale systems, and mobile devices.
Step 2: If You Have to Key-In the Transaction, Don't Skip the Verifications
That is, unless you like spending more money. The level of risk (and therefore cost of the transaction) is determined by the amount of information present. Card not present transactions will prompt you for things like CVV, Zip Code, and Billing Address (the number, not the street name). If you skip these, expect a higher rate.
Step 3: Stay Away From the Banks
It sounds crazy, but banks (especially the large ones) don't always have your best interests in mind. Their sales reps are compensated differently, and in some instances they outsource the entire process. Sometimes, it is actually a completely separate business that is processing your transactions.
To put things in perspective, it is not uncommon for us to slash a bank's rates by 15-30%.
Step 4: Make Sure You Have the Right Pricing Model
It seems simple enough, but this is where the majority of people who come to us for help have been led astray. Most of the time this is unintentional, because there are literally hundreds of ways to price a merchant account. Factors like average ticket, frequency of transactions, and total sales volume are just a few of the factors that are considered when pricing an account.
Just because a pricing model is working for your friend or neighbor, does not mean it will be a good fit for you. Interchange Plus, Tiered, and Flat Rate pricing all have their advantages and disadvantages. Make sure you choose the right one for your business.
If you are unsure, SCHEDULE A FREE CONSULTATION and we can help you decide.
Step 5: Choose the Right Vendor
This final step echoes the last one. If the person with whom you are trusting your money does not have the experience to know what pricing model is going to benefit you the most, find someone else. Would you get your haircut who just learned how to hold the scissors? Remember, most sales reps have less thaan 6 months of experience.
The common theme of our communication is to make sure you are educated on all aspects of your merchant account. At the end of the day, these are banking relationships with real contracts that you are entering into. Some business owners do not fully understand that, and get themselves into difficult situations with unfair terms. Ultimately it is your responsibility to make the right choices, but we are here to assist whenever you need us.
