How to Save Money with a Merchant Account for a New Business
Did you just start your new small business? Well, if you want to accept credit card as a form of payment from your customer, you will need to pay fees. This is unavoidable, of course. You might have to pay up to 5% of your total transactions every month.
In spite of this, customers love using their cards instead of their cash. This is mainly due to the ease with which a card can be used to pay for something. Does this mean you have to swallow up the exorbitant fees and deal with it? Not really! You can still reduce the amount your merchant services account will cost your new business.
Don’t Rush Into Choosing a Provider
Even before you select a merchant account provider, there are savings to be had. You can shop around a little and get a feel for the industry. Enlisting the help of a professional with experience in the field is a good choice. The gist of this is you need to build a list of all the viable providers for your business and have a breakdown of their costs. Their actual cost, not the ones they advertise willy-nilly on the internet.
Think about the total rate you have to pay, which is the total of all their fees. Look for contracts, fees for early account termination, service and application fees and more. Check if you can get some of the current prices discounted or waived entirely. Talking to each merchant account provider before getting an account is a good way to do this.
After you have compiled a list of all the providers who are right for your business, start weeding out those who are overboard or refuse to listen when you ask for discount fees to be reduced. Soon you will have a list of the best. Check for versatility, differences in rates for online payments, and other small costs to get the right fit for you.
Always Swipe the Cards
Credit and debit cards have four ways to be used to make a purchase. They can be swiped using the magnetic stripe, inserted and read using the microchip on the card, tapped on the terminal using NFC technology (not available on all cards) or the information can be entered into the terminal manually for the payment to be processed. If you can, always try to make your customers swipe, insert or tap their cards physically.
The reasoning behind this is that you are charged a higher processing fee if the card isn’t used physically when making the purchase. Fraud is very common with credit cards. People can use cameras to take pictures of a card and then use its number and expiry date to make purchases without having the card present. Because of the risk of fraud, you are charged more for non-contact transactions. You can save quite a bit of money by asking your customers to use the terminal instead.
Try to Have Minimum Transaction Limits
For a new business, this is important because every cent you save counts somewhere. Since most of your business transactions at the start will be small, try to have a rule in your store for credit cards to only be used if the purchase is more than a certain amount. This is so that the discount fee per transaction won’t mount up over time until you are barely making a profit from your sales.
The basic takeaway from this is that your new business can make use of a merchant account without having to feel like it is losing money. The point of these accounts is to make your business more successful over time. While it is true that you will never be able to truly avoid having to pay fees for your credit card transactions, you can always try and reduce the cost to you by choosing a quality merchant services account provider.