Accepting payments seems like it should be cut and dry. A customer pays an agreed upon amount for agreed upon goods or services. All good, right? Well, not quite.
With online and digital payment methods becoming more commonplace and more popular, there are a number of new factors to consider when it comes to accepting payments. The more ways you can be cost effective, the more of your hard-earned money gets put back into your business.
At Elavon, we understand that you need to retain as much as you can from every card transaction. We’ve compiled some tips and helpful hints and strategies to help you understand payments better so you can make the most out of them.
Online and digital credit card payment acceptance has grown in popularity over the years because it's so easy and convenient for the consumer, but with COVID considerations, it’s also more sanitary and touchless. However, it doesn’t matter how easy, convenient or touch-free accepting digital payments can be, they still incur acceptance fees.
So understand these common credit card processing fees so you can make the move to be more fee-free. What’s the first Elavon tip for being more efficient?
TIP #1: Understand various Credit Card Processing Fees
What are credit card processing fees? They are fees that are attributed for transactions to your business. Know the fees so you can make your businesses’ payment processing more efficient in the future.
Interchange Fee — A charge collected on behalf of the payment card network on every transaction where the card is used to make a payment
International Fee — This world-traveler of a fee is charged on non-U.S. issued payment cards presented as a form of payment to businesses located in the U.S.
Chargeback Fee — This payment card fee applies when the customer or their card issuing bank dispute a payment transaction claiming fraud or faulty goods or services and perhaps non delivery of same.
Now that you know certain elements of the fee landscape, you can be smarter when you’re evaluating your choice in payment processor companies. Evaluate the fee structure by requesting a sample statement to understand what to expect. You want a provider that is clear and transparent, while offering opportunities to help save your business money through their payment processing services.
With thirty years of experience and expertise in this field, Elavon has some suggestions on what you can ask from a potential payment processor. Review our white paper, “20 Questions to Ask Before Committing to a Payment Processor.”
TIP #2: Pass on The Transaction Cost
Offset or minimize transaction costs a surcharge may be appropriate for customers who want to pay using a credit card.
Accepting credit card payments can be more expensive than other forms of payment, especially if you have a new or small business. The challenge is that customers love using a credit card to pay. It’s easy, convenient and, since the pandemic, considered a touch-free option customers prefer. Fundera reports that 80% of consumers prefer card payments over cash. So how does a small business handle that cost?
Consider a surcharge. Yes, you are passing the majority of the credit card acceptance fee to your customer, but with only cents on the dollar, they don’t feel a huge hit on a single transaction. As a business owner, however, those cents add up over hundreds or thousands of transactions a day. Debit, ACH payments, eCheck and cash payments cannot subject to surcharges so make sure your customers know that. If the surcharge information is properly disclosed clearly and accurately, it can be successful and save money for the business.
Businesses which offer their customers an alternative way to pay aside from in person payment may also collect a convenience fee for each transaction, to help cover the additional costs associated with the alternative payment method, whether online, through the mail or over the telephone.
TIP #3: Accept ACH Payments
Reduce payment aches with ACH.
ACH is short for Automated Clearing House. It’s a financial network that allows direct payments via a customer’s consumer bank account information. Elavon’s ACH-eCheck solution enables your business to accept consumer bank account information via web, phone or mail as a form of direct payment. Bank account payments offer your customers a way to pay without requiring a PIN or worrying about which brand of credit card they have.
Those are just a few industry-wide ways for any business to save money on payment acceptance and Elavon has some additional opportunities through solutions we offer our merchant customers.
Interchange and assessment rates are the majority of business card acceptance costs. Elavon is always innovating new ways to reduce those costs to save your business money.
Commercial Card Optimization - If your business accepts a large number of commercial and corporate cards, which carry some of the highest interchange rates, this program makes sure that all of the commercial card transactions qualify at the lower commercial interchange rate, saving your business money. And the proof is in the pudding: See how this Ivy League University used Commercial Card Optimization to secure the lower commercial interchange rates to minimize its payment processing costs.
Debit Card Optimization - Let’s not forget about the debit cards. This program requires a PIN entry for every debit card transaction. This simple change in debit card authorization can save money by running these transactions through the more cost-effective PIN debit networks.
It’s your business. At Elavon, we’re always working to make sure you hold on to more of the money you earn. Contact Elavon today to learn how to save your business more.
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