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For any small business owner, knowing where to save money and cut costs is important to your future. Reviewing your finances at the end of the month should be common practice for all businesses, but what actions are you taking to resolve the issues you discover? If your restaurant or small business processes a high number of debit and credit cards, the transaction fees could be eating into your profits—to the tune of 2-8%. The more money you process through debit and credit cards, the more you will be paying out in transaction fees.
Scott McManus, the president of retail websites EZCorporateClothing.com and Something Greek, knows the impact
of high credit card transaction fees firsthand: “The problem people miss is that they think that 3, 4, 5, 6 percent is not a big percentage, but after your gross sales, it is. After rent and other expenses like labor, it’s a huge deal.”
The lowering of high credit card fees in the United States
is an ongoing battle in in Federal Court. Last year alone a $7.2 billion settlement was reached regarding an antitrust suit against credit card companies for fee-fixing. But even with this settlement, quite a few major chains and thousands of other retailers opted out and have since filed a new suit.
All small businesses need to accept credit cards to survive—there is no question about it. The question is, how can you maintain your current practices and save money in the process? Here are several suggestions to lowering your credit card transaction fees within the next few months:
Monitor Monthly Statements
“Reading the fine print” is a familiar practice for every business owner. You need to be 100% confident in your knowledge of a contract or billing statement, and in this case, how much you pay in credit card transaction fees. But don’t stop at checking transaction accuracy; you also need to make sure you are receiving all of the specialized discounts and incentives to which you are entitled.
Former merchant services executive Vito Pagano said in an article
, “Most processors do not revisit the growth or changing needs of a business, which results in outdated pricing and excessive surcharges to the business.” You may be eligible for saving money and not even know it. If you are paying too much or have not heard from your provider in a while, it may be time to shop around.
Compare Rates of Processing Companies
You should never feel confused or misinformed when it comes to how much you pay in credit card processing fees. There are many factors that determine the cost of a processing program such as average ticket, swiping vs. hand keying, and type of credit cards used. By understanding how your business uses credit cards you can compare rates and find the best credit card processing
for your small business.
In fact, all of the top credit card processing companies will gladly compare their rates for you. Those that have the cheapest rates, fastest deposits and premier in-house customer service will be more than willing to showcase what sets them apart from the competition—and most importantly, how much money they can save your business.
Switch to a Better Provider
When it is time to switch be sure you’re crystal clear on the pricing program. Some companies may offer cheap rates, but subpar customer service and other extra fees. Others may not have certified security measures or may charge more after a grace period. Flexible rate structures are ideal and easy to arrange to your advantage.
Changing from one provider to another is not difficult with an experienced firm. You should be able to continue accepting payments during the transition and have your account fully operational in less than 48 hours. Some companies also subsidize any fees when terminating your old account.
You have nothing to lose by shopping around, because any elite processing provider will offer you a free rate analysis. Do yourself a favor and look for a cheaper alternative—it could mean the difference of hundreds or even thousands of dollars a month.
Kristen Gramigna is Chief Marketing Officer for BluePay, a credit card processing firm, and also serves on its Board of Directors. She has more than 15 years experience in the bankcard industry in direct sales, sales management and marketing.