You want more from your merchant account provider, but you don’t know what to do or how to go about doing it. Here’s what you need to know to improve your company’s ability to accept cashless payments.
Ask For A Complete List Of Charges
Asking for a list of fees seems like common sense, but many merchants forget to ask for all of the fees they’ll be charged. Naturally, we want to know the per-transaction fees. But, we also want to know how much the merchant account will costs us for things like chargebacks or failed transactions and for any disputes the customer files with his or her credit card company.
Check this site which compare merchant accounts to get an idea of what service providers are charging for these days, and then ask each individual merchant services provider for a list of their fees.
Most fees for transactions include two types of per-transaction fees, with some merchant account providers charging a monthly fee on top of that.
For service providers that charge a monthly fee, you’ll usually pay lower Interchange rates plus a flat per-transaction fee. An Interchange rate is the fee credit card companies charge for transactions.
It’s set by credit card company networks, and is split between the credit card issuing banks and the network.
Sometimes, the provider marks up the Interchange rate charged by the credit card company. When a service provider doesn’t charge a monthly fee, the interchange rate is replaced with a higher rate, and sometimes a higher flat per-transaction fee.
Other charges include chargeback or refund fees, and tiers for various types of transactions – keyed-in transaction vs. swipe or “dip” transactions, for example.
Ask About Service Contracts
Service contracts keep you tied to one merchant services provider, and it’s a way for the provider to charge lower fees, in theory. If the provider knows you’ll be doing a high volume of transactions, they’ll make money on the length of your contract and the sheer number of transactions you make.
Ask About Mobile Transactions
This is the future of cashless payments. If you’re not making the transition to near field communication, you’re putting a cap on the length of time you plan on being in business. That’s how prevalent these types of payments will become.
Consumers want easier ways to make payments for goods and services. Being able to wave their phone in front of a terminal and have it automatically deduct money from their bank account is much more like paying with cash, where the customer controls the transaction, and less like a credit or debit transaction, where the merchant takes the card and performs the transaction for the customer.
Older generations didn’t mind doing this. Younger generations do.
The success of ApplePay, and other similar NFC payment schemes demonstrates the market for this type of payment structure. So, ask your provider about NFC capabilities.
Kai Goddard has plenty of business and retail experience and he always enjoys the chance to share his experiences and insights with others. He is a regular online contributor for a variety of business and entrepreneurial websites.
Kidal Delonix is a contributor to Mr. Hoffman's blog. The views and opinions are entirely his/her own and may not reflect Mr Hoffman's views.
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