Accounting experts at Intuit recently revealed that small businesses that do not accept credit cards miss out on an average of $7,000 in revenue every year. Accepting a variety of payments increases your pool of potential customers and allows you to accommodate those prospects who want to buy, but are online or simply don’t have cash in hand.
The ability to accept and process credit cards can boost your business considerably, but what, exactly are all those processing fees really paying for? While every processor costs differently and has different fee setups, learning more about the types of charges you’ll encounter and the sometimes invisible benefits, processors offer can help you determine which processor is right for you and give you peace of mind about your business.
What to Expect from your Payment Processor
A payment processor allows you to safely accept payments from customers; built in security features are designed to protect you from fraudulent card use and the customer from data breaches and theft. A payment processor takes the risk out of accepting credit cards and allows you to reap the rewards of accepting multiple forms of payment.
Accept Payments in a Variety of Ways
While you can process a payment in person, you can also accept payment online or even over the phone; accepting credit and debit cards allows you to complete sales even when you are not right in front of your customer or client.
Clear Explanation of Fees
While every processor varies, all charge fees to process your credit and debit card sales. There are several different types of fees – and you could be paying some or all of these each month:
- Interchange Fees: This is the cost of actually processing the sale, and may vary depending on the card and situation. If you are processing the purchase in person and have the card in hand, your interchange fees might be lower, because there is less of a fraud risk. Online or over the phone payment charges may be higher, because there is more of a risk involved.
- Monthly Gateway Fee: The fee charged by a processor to access the payment system; this can range from $10 to $35 per month.
- Monthly Statement Fee: Some processors charge a fee to generate a monthly statement; if you are being charged for this, you may be able to avoid it by switching to e-statements instead.
- Application, Setup and Equipment Fees: These vary by processor, but in general, these are the costs of getting started. If you are also buying equipment, it could be a sole, upfront cost or you could be assessed a monthly charge; knowing exactly what you are paying for can help you reduce your costs for these startup fees.
- Minimum Monthly Fee: If your processor has a minimum required fee each month and you do not reach it, you may be charged an additional fee to meet the set minimum. For example, if your processor has a $20 per month minimum and your charges add up to only $18, you’ll be assessed an additional $2 in fees.
Reviewing any proposed upfront and monthly charges before you choose a provider can help you make the right decision for your business. Not all processors charge all fees, but if yours does, you could be overpaying each month.
Advances in Technology
Ideally, your processor allows you to accept not only a variety of payment types, but is equipped with the latest technology as well. Credit card security and processing laws are evolving, so the ability to accept mPOS (Mobile Point of Sale) payments and to be EMV ready and compliant (to accept cards with heightened security chips) can help you safely accept and process payments in an ever changing business environment. Being compliant with these new technologies not only protects your business, it shows customers you take their data and security seriously, too.
Accepting credit cards can help you expand your business, and knowing exactly what you are paying for can help you determine which provider is right for you – -and ensure that you are not overpaying for your services.
If you are ready to take your business to the next level and begin safely accepting credit cards and other forms of payment, we can help. Contact Merchants Resource Group to learn more about payment processing and to see what our unique solutions can do for your business. We’re here to help you grow – and ensure that you find the perfect solutions for your business needs.