HIGH RISK MERCHANT ACCOUNT SPECIALISTS

28 Mar

By Aditya Williams

Category: Uncategorized

DON’T OVERPAY FOR CREDIT CARD PROCESSING Comments Off

DON’T OVERPAY FOR CREDIT CARD PROCESSING

When you go to buy a sofa, you make sure it’s comfortable as well as trending, its fabric should be nice, it should fit in its intended room and most importantly it should be under your budget


!While purchasing something as ordinary as a couch we are so careful then why we become irrational in case of credit card processing.


To meet the future uncertainties of your business it is necessary to cut cost wherever possible. Every penny of your capital helps you grow your business.  Based on current consumers spending trends and growing competition, being able to accept credit card is one business expense you likely can’t avoid.


This digital era has brought the payment revolution. Customers are looking forward to pay for their purchases the way they want.  Enabling credit and debit card payments may incur some cost but this will likely increase your business’ sale and efficiency. Now when you know to stand out in market you need credit card processing it’s important to do intense research before finalizing your payment provider. You have to save your business money without compromising the quality of credit card processing service. Like we approach different shops and review multiple options before buying a perfect sofa similarly selecting your payment processor should be no different.


When evaluating potential companies, ask tough questions covering all your doubts regarding to processing rates and fees but before that do critical homework which include following points discussed further in the article.

Saving your money is in your hand, be smart!

GET THE CLEAR PICTURE OF PRICING STRUCTURE AND FEES

What if I say that you have to take your sofa home without knowing how it looks? So, it’s quite obvious that before making any commitment to a processor or provider get a complete clear picture of your transaction fees and how it is determined. There can be endless hidden charges, so ask up front for a list of all the ancillary fees you may get charged.

Some common charges are:

  • application fees
  • batch fees
  • annual fees
  • statement fees
  • IRS fees
  • set up fees
  • compliance fees

These charges will affect the whole pricing structure and how much you are paying each month. One should be aware of fees they are being charged so that they can accommodate their cost each month and can find a difference if something does change.


Every pricing model is different from each other. Don’t hurry up; try to understand every section of it because everything that glitter is not gold!

Most adapted pricing models in credit card processing industry are:

No monthly fee pricing model: If you are a new business then it is a wonderful option. But once you have a good customer base, you could be paying more on a no monthly fee model than those traditional merchant accounts

Flat rate pricing model: The well known flat rate providers can approve a merchant and allow them to start accepting payments in a matter of minutes. Businesses processing under 20K a month in credit card transactions have this model as a good option. The most common flat rate is 2.9% and usually 30 cents per transaction fees. But don’t wait once your business starts ramping about 50K, 100K and 500K+ per month, 2.9% is a pretty penny to pay for just accepting credit card payments.

Tiered pricing model: It is also known as bundled pricing because it allows processors to group interchange fees into general rate tiers of their choice. It’s a quite complicated model than the above-mentioned model. In Tired Pricing Model personal credit or debit cards come at the qualified rate, whereas corporate and international cards come in at the non-qualified rate.

Interchange plus pricing model: Otherwise known as cost-plus pricing, is the fee that processing banks are charged by Visa, MasterCard and Discover to process credit card transactions. This pricing model adjusts for the specific interchange fees associated with each transaction on the basis of variables like card type and payment method. Interchange plus pricing model is best suited for businesses processing high volumes, B2B businesses, and wholesale businesses. Once you understand this type of pricing model it can play a significant role in savings for your business. Interchange for a debit card is commonly regulated at 0.05% and 22 cents while a credit card’s interchange average is 2.00% and 10 cents.


Only after understanding the pricing structure, select the payment processor who offers a pricing structure that works best for your business.

 

COMPARE AND DECIDE

Many businesses end up paying more than required for low grade services because they don’t compare different payment processors and their offers. One of the important steps in saving your business money is to compare your current paying services with other payment processors which may work as a measuring tool in comparing rates and in deciding which provider can offer your business the most cost-effective solution. You might think that what is being offered will accurately reflect what a payment processor will charge but unfortunately, it doesn’t happen in most of the cases. Only a few payment processors, like iPayTotal, offer trustworthy services and help in simplifying your comparison. Research the goodwill and market value of the provider. If the payment processor doesn’t have a good reputation in the market or you find any case of dishonesty, then this is an indication that their services may harm your business. Keep an eye on the consumers’ feedback and reviews because that will tell you a lot about whether you should trust that payment provider or not. IPayTotal is one of those honest providers in the market that works transparently and can also help you in comparing.

OPTIONS FOR EQUIPMENT

Investing in equipment incur a pretty heavy cost. When you want to cut cost it is really important to know your business type and depending on your business type determine required equipment. Merchants can use a computer, the internet, a credit card machine, or a cellular/ regular phone to process transactions. Ask everything about the device. Is the device new or restored? Are you paying to lease them and how much will that cost?


It is advised to better ignore any sort of equipment lease because many a time it turns out to be a bad deal. Merchant gets trapped in the lengthy equipment lease and invest in a costly point-of-sale system. If you are getting a credit card terminal for your business, double check that the model you get is already EVM compatible. Be alert and don’t waste money on outdated equipment.You can avoid costly mistakes by understanding what kind of functionality will work best for your business and find a solution accordingly. If most of your customers are okay with emailing the receipt then you can save money by not getting a receipt printer. Similarly, if your transactions are mostly by cards then you many not require an expensive cash drawer.


There are plenty of affordable options to set up a properly functional retail point-of-sale on your own tablet or phone. Think wisely before investing in a full-blown POS solution.

VOLUME DISCOUNTS

A volume discount is a financial incentive to encourage individuals or businesses to purchase goods in multiple units or in large quantities. In other words, if you process above a certain amount processors rewards increased processing by offering volume discounts. Some processors play smart and provide volume discounts only to larger merchants, It would be better if ask yourself and get proper information regarding the same.


Some processors play tactics and enjoy your savings. Apart from interchange rate they add their extra margin on it, so it’s completely on their ethics if they pass the saving to the merchant or not. For instance, iPayTotal’s pricing is transparent and they will let you know their profit margin and make sure that you are not in any loss. Here, trust and understanding between merchant and processor is very important

FEATURES OF YOUR STATEMENT          

It is important to know about the features of your credit card processing statement and how to read it. You can not completely rely on your provider’s statement guide, nor its sales or customer services reps to explain all fees. Contact your payment processor immediately if you have any doubt about what you are being charged. There is no single method which fits in analyzing any statement because every business and situation is quite different. Your total change from month to month which gives the provider a chance to trick you and charge more. Hence, it becomes a necessity to get some basic knowledge about some fundamental concepts of your statement.


Make it a habit to examine more than one statement side-by-side to avoid missing anything. You need to check every fee on your statement to identify its source and confirm the amount is what it should be. Your processor may try to confuse you by burying hidden fees and incidental charges but you have to be attentive and alert throughout.

CUSTOMER SERVICES 

You being an entrepreneur have complete right to seek information whenever you feel. Get a customer service rep’s name, number, office hours, and ask if they give 24/7 support team like iPayTotal. Be very sure to get the name, email, and direct phone number of an actual representative. Your business’ safety is in your hand because they are lot of cases of fraud in the market.

RESEARCH AND RESEARCH!

Be confident about your research. Ask as many questions as possible, keep a regular check on your statement. By doing proper research you can save up to 40% each month!! Don’t just believe and sign with the first credit card processor that comes your way. Compare and decide, choose the best for your business and increase your efficiency. Select a trustworthy companion like iPayTotal and let’s get started!!

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