Maximizing Profits: Why Every Business Needs a Merchant Services Rate Review
Rate Reviews can help you save money, save time and improve your processing platform.
Getting a rate review is a great way to see if your business is paying too much to process credit cards. Credit Card processing rates tend to creep up over time. Merchant service companies and the card issuers (Visa, MasterCard, AMX) implement annual fee increases that can really effect your cost to process credit cards. It’s little things like authorization fees and transaction fees that can be a killer.
A rate review of your merchant services account will reveal if you are paying too much or if you have a great deal. Here are a few things that can effect the cost of processing credit cards.
A rate review will help you understand the costs associated with processing credit cards for your business. Merchant services expenses are one of the biggest operational expenses that your business incurs. Its important to get a rate review to determine if there are ways to reduce this expense.
Contact Mike Daniel now to get a no hassle, no commitment rate review.
- Discount Rate – Your Processor’s charge, expressed as a percentage rate plus a Per Item (P/I) fee on each transaction (transaction fee), and is set by your processor or merchant services company. Example of a discount rate: 0.94 + 30¢.
- Authorization fees – Occurs when a merchant receives transaction approval after the acquirer validates the transaction with the issuer/processor.
- Statement fees – Your processor may charge this fee to send you a printed statement or provide a monthly processing statement.
- Account Maintenance Fees – Fees charged for research or account updates like address or bank changes.
- Address Verification Fees – Some processors may charge an address verification fees.
- PCI Non-Compliance Fees – Major Issuing Banks created PCI (Payment Card Industry) compliance standards to protect personal information and ensure security when transactions are processed. Due to the acute rise in data breaches, hackers and identity theft, all processors now charge breach insurance or PCI Compliance fees to insure against such a breach, which could result in hundreds of thousands of dollars in damages and fines. However, the amount you pay for PCI Non-Compliance varies widely.
Give yourself a Christmas Bonus this year, get a merchant services rate review!
Could you use an extra $3,000? You may be paying too much to process payments. A payment processing rate review is a side by side comparison that shows you where you can save money. You might save 20% or more by switching processing models. Go ahead, get a rate review and give yourself a Christmas Bonus!
Calculate your Effective Rate to get an idea if you are paying too much.
The Effective Rate is a simple but effective benchmark that reveals the real, actual percentage of fees that you are charged to process all transactions. Here’s how to calculate it:
- Look at your merchant services statement and find the Total Fees Paid for the month. Then divide that amount by the Total Volume of credit card transactions processed. (Total Fees ÷ Total Volume = Effective Rate Percent)
- For example: Bobs Rental paid $2,551 to process credit cards last month. The total amount of credit cards processed was $85,793. To determine Bob’s Rental effective rate, divide $2,551 by $85,793 = 0.0297 or 2.97%
Are you paying too much to process credit cards? That depends on many factors.
Basically, the cost to process any credit card transaction always includes 3 fees: Processor’s Discount Rate + Per Item Fee, Interchange Rate (% + P/I), and Assessment. Some processors hide these fees by combining them into a single fee, like Tier billing, which makes it difficult for business owners to understand the fees they pay to process credit cards.
Want to learn more? Contact Mike Daniel now to see if you have a good rate.
A rate review can open the door to Omni Channel Processing.
Today’s omni-channel processing platforms offer you the ability to manage your business from anywhere; view reports, manage inventory, manage customer loyalty programs, send invoices and take payments through your hosted payment page.
According to the Spring 2023 Carat Insights Report, 59% of U.S. consumers have used Buy Online, Pick-up In-Store (BOPIS) to make purchases at retail stores and 85% of GenZers and Millennials have used BOPIS. If your Point of Sale system is synchronized with your website, you can increase sales by offering BOPIS because it bridges the gap between your website and your physical store.
Another insight from the Carat Report shows that 77% of consumers order food directly from restaurant’s apps. If you have a POS system like Clover, you can integrate food orders directly into your Clover Station.
Today’s payment processing platforms are designed to expand your footprint. Whether you operate a deli, auto repair shop, hair salon or liquor store, these platforms integrate your website, inventory, online scheduling and delivery. Get more for less:
- Online order aggregation
- Invoicing and accounting integration
- Payroll integration
- Reward programs for your customers.
- Physical and virtual Gift card programs
Getting a rate review will open new opportunities and may increase revenue streams.
Want to learn more about the time and money saving benefits available to you?
Find out if the Merchant Surcharge Program might be right for you.
The Merchant Surcharge Program allows you to add a percentage fee to your customer’s credit card transactions to help offset your credit card processing costs. Basically, this program helps you recover credit card expenses by applying a 3.00% fee to credit card transactions. The fee is itemized on customer receipts. Debit cards and prepaid cards are not eligible as only credit card transactions apply. According to the Carat Report, 58% of digital wallets are connected to debit cards.
Debit cards are the most popular payment method for online transactions as well as in-store payments. Again, according to the Carat Spring 2023 Insights Report, 80% of online transactions are done with debit cards and 79% of instore purchases are made with debit cards. The Merchant Surcharge Program (aka; dual processing model) can substantially reduce processing fees for your business. Find out if the surcharge program is right for your business.
Getting a rate review is an easy way to learn if your current processing rates and fees are too high. Contact Mike Daniel now to learn more about credit card processing. I will tell you if you have a great deal or show you where you can save money. My mission is to inform, educate and consult with you about the merchant services business. I’ve been helping entrepreneurs save money, save time and grow their businesses for the past twenty plus years. I’ve worked with auto repair shops to eCommerce businesses and everything in between. I’d like to help you! Give me a call or email for your free, no hassle, no obligation rate review.
