Being able to accept credit card and debit card payments from customers is now an integral part of running a successful business. But granting shoppers fast and convenient payment options can cost companies big bucks. That's because financial institutions, merchant service providers and independent third-party providers all charge businesses a variety of fees that, although miniscule, can add up to a significant monthly expense. These fees include:
Fortunately, there are ways you can cut back on merchant services costs without sacrificing quality of service. Here's how.
1. Shop around. These days, there are plenty of options for finding a merchant services provider. Banks, credit card companies, third-party providers - they all offer merchant-services packages at varying costs. Before signing on the dotted line, make sure you shop around to find the best price available and don't be afraid to play providers off one another to land the most attractive deal. What's more, many providers have a habit of raising their prices after a month or two of service, so be sure to read a contract's fine print to avoid unpleasant surprises.
2. Avoid packaged goods. Many providers pitch companies merchant service plans that include features such as software upgrades, paper, backups, downloadable accounts, and email marketing tools. While these suites can save money, they can also prove wasteful for companies that don't take full advantage of them. Rather, companies would be wise to purchase these value-add services on an as-needed basis rather than commit to additional package fees.
3. Consider direct-debit. Direct-debit allows a company to deduct a payment directly from a customer's bank account. Using electronic funds transfer technology, money is taken directly out of a customer's checking or savings account and deposited into that of a business. By cutting out the middleman (i.e. VISA or MasterCard) for recurring billing of frequent transactions, a company can avoid having to pay hefty merchant-services fees. However, there are risks involved in direct-debit. For example, there are no guarantees that a customer's account will contain sufficient funds to cover a transaction so be sure to weigh the risks before eliminating a third-party provider altogether.
4. Keep an eye on chargebacks. Like it or not, there will be times when a customer will request his money back from a service or product provider. This event is typically accompanied by a fee, levied by the merchant services provider, to cover the costs associated with processing a chargeback. In addition to reversing the charge, companies are typically charged upward of $50 per chargeback, aren't always notified of the claim and disputes are often settled in favor of the cardholder. The result: a costly and cumbersome event that can hurt a business's bottom line and possibly tarnish a company's good standing with its merchant services provider.
To avoid such a fate, try to ensure that the name of your business matches that which will appear on a buyer's monthly statement for easy recognition. In a bricks-and-mortar situation, clearly display the conditions of the sale, as well as your store's refund and return policies. Keep an eye out for suspicious transactions such as those using foreign credit cards. And rely on a verification system that compares billing information with a card holder's records.
5. Leverage your data. Sometimes cutting costs isn't about watching your bottom line but getting the most bang for your buck. For example, while merchant services have long helped companies increase store productivity, boost sales and cut operational costs, many businesses are now viewing them as a marketing vehicle - an opportunity to gather data on customer buying behavior, manage inventory, empower store representatives, enhance customer service and establish strong loyalty programs.
Merchant services may carry high prices but with a little comparison shopping and plenty of due diligence, today's companies can offer customers convenient payment options while keeping transaction costs down.
Are you paying too much for your contact center software? Are you satisfied with its capabilities, or do you wish it did more? These are questions most businesses don’t take the time to think about, even though contact center software is one of the most important investments that you’ll make. With a little bit of planning, you can end up saving money and still end up with better functionality. more
Video conferencing is quickly becoming one of the most important communication channels for both small and big businesses. As more businesses turn to this technology, expectations about the experience are also rising. It’s not enough to just offer video conferencing as a communication method. You also need to meet minimum audio and visual standards, and there’s even proper etiquette to consider. more