In today’s volatile environment, limiting and controlling business expenses is essential.
While customers expect to use credit cards anytime, many merchants just accept the fees without checking if it’s competitive. As a business owner/CFO, it is in your best interest to review your fees regularly and understand how all costs are calculated.
Just like negotiations with suppliers and vendors, you need to ensure that you’re not paying too much to your credit card processor. But how do you know where to start negotiating with credit card fees?
Here’s a look at 5 indications you could be overpaying:
1. Your bank setup your credit card processing
Banks are not in the business of credit card processing. They store, save, and lend money.
When you set up your business account, and they offer you credit card processing, it’s all about profit for them. Like the wine menus served at a restaurant, it’s all profit. They are not attempting to be competitive. They are offering you convenience, not the best pricing.
9 times out 10, you will see immediate savings by switching your merchant account away from your bank.
2. You’re using Square, PayPal or Stripe
If you haven’t noticed, prices have changed over time.
When Square was first introduced, they began with competitive rock bottom pricing. This was a strategy to gain marketing share and mass adoption.
Once they became established, their prices have risen and are no longer special. The same holds true with their technology, which began as an innovation but is now considered common.
All three of these, Square, PayPal, and Stripe presume a level of ease and convenience, but their pricing is far from stellar.
If your business is processing more than $2000 a month, you would be doing yourself a disservice if you don’t evaluate an established credit card processor.
3. You have a flat rate pricing
If you utilize a flat rate processing option but do not have the kind of business that would benefit from it then you are just overpaying. Certain cards are less expensive to process while others can be costly. However, the flat rate needs to cover all the costs else the processor may end up losing money.
The claim is that the flat rate makes billing simple and easy. Sure, that might be true.
It’s also true that you could be paying 20-50% more than necessary.
4. QuickBooks processes your credit card transactions
QuickBooks serves as a convenient service to manage your company’s finances. It tracks expenses, manages your books and helps with accepting payments.
The fees they charge for credit card processing are higher than necessary. Just like banks, they have a first-mover advantage because they are already tied into your financials.
The temptation is to just leave it alone and all in one place.
Unfortunately, times have changed, and you must be diligent about investigating your number. Every dollar you pay should prove themselves worth it.
5. You’re leasing your payment terminal
One of the sneaky ways merchant services providers lock businesses into overpaying is by leasing equipment. Rock bottom prices are offered on the processing while the difference (or profit) is made separately in the leasing.
When you agree to lease your equipment for 4 years, you not only pay extra for taking payments, you also are bound to the leasing company for 4 years!
Sometimes the equipment is necessary and beneficial, but not always. Be careful when agreeing to lease equipment and make sure you understand the contractual obligations.
This article was brought to you by Data One Merchant Services. We hope to win your business by exposing you to some of the ways you could be overpaying. We are a company you can trust, with a reputation of transparency and excellence.
For a free statement review, quote or consultation, contact us at: 800-818-0420.