In today’s market, shoppers are using cash less than they were 5 years ago—replacing the dollar bills in their wallets with plastic payment methods.
Credit cards offer both security and convenience to shoppers, but they can add up to costly processing fees for businesses if merchants aren’t careful. As the trend continues towards a cashless system, failing to accept plastic payment methods isn’t the answer. However, with the right strategies and support, businesses can make credit card transactions practical for their interests too.
To help your business cut credit card processing fees, read on for the top ways to save below.
Swipe Every Time
One little-known fact about credit card processing fees is that banks charge more when card information is input manually. This is because manual transactions are susceptible to fraud and human error, something that banks consider a liability. Credit cards contain microchips and magnetic strips with built-in security features, but when information is input manually, clumsy fingers could accidentally hit the wrong keys and it is much easier for information to get stolen. To prevent these pitfalls, train your staff to swipe credit cards whenever possible. This will not only prevent fraud, but it will also add up to significant savings.
If you do suspect fraud, asking the client for ID and checking it with the name on the card is one small step that can save you big time down the line. In addition, requiring customers to input personal information, like their zip code, can safeguard your business and save money.
Consider a Minimum Credit Card Sale Requirement
Depending on the type of business you own, you may handle a lot of small transactions that cause you to accumulate a large processing bill. If this is the case, imposing a minimum spending requirement for credit card sales could encourage customers to use cash on small purchases. For example, if you own a coffee shop, you may have a lot of sales under $5. If you have a small profit margin on these transactions, the credit card processing fees may not be worthwhile. By imposing a minimum spending requirement, however, you can reduce your credit card processing volume.
Encouraging cash transactions for small purchases can be in a business’s interest, as cash allows you to pocket 100% of the net revenue. However, with 40% of consumers choosing credit cards as their preferred payment method, you need to make sure that a minimum sale requirement doesn’t deter clients at the point of purchase.
Process Transactions Every Day
When it comes to processing transactions, it is essential that you set up your terminal correctly. Some companies unknowingly incur excessive processing fees because they allow transactions to stack up throughout the week. When you wait to process transactions every couple of days, the transaction volume appears higher for that period, causing a spike in the processing rate. On the other hand, when you make a habit out of doing your batch processing at the end of each day, you lower the number of transactions per period. This allows you to secure a better rate and earn cost effective savings.
Ask an Expert
Understanding credit card processing rates can be a headache for business owners who don’t have a background in finance—especially when juggling other business roles. Average credit card processing fees can vary depending on the provider, and whether you’re dealing with Visa, MasterCard, or other payment method affects how much your business will have to pay in processing fees. With so many variables, it is essential to have an expert on your side that can break down the types of credit fees to help you understand your options.
Expert advisors are often able to negotiate better rates, especially if you have a decent transaction volume. These advisors have key insights on how you can achieve savings either through lower processing rates or by eliminating other hidden credit card fees. Some advisors, like Strategic Capital, even work with a multitude of partners in order to find better processing rates for clients. In fact, through our partnerships, we are able to help save our clients an average of $510 each month.
When it comes to credit card processing fees, small business owners need to take action to prevent needless fees. While a couple of cents or dollars doesn’t seem like much when you look at a single transaction, these fees can add to a shocking amount in the long run.
By implementing the above ways to save on your credit card processing fees, your business can become more cost effective. However, there is so much more that you can achieve with the right team of financial advisors.
If you’re ready to learn more about credit card processing and ready to start saving processing fees, contact our expert advisors at Strategic Capital today to learn how our processing services can help your business and how you can apply today!
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