Small to medium-sized merchants often feel like they have no control over the costs associated with accepting card payments. This problem was exacerbated by the pandemic when the number of more expensive ‘card-not-present’ transactions increased thanks to consumers’ shift toward digital experiences. Additionally, chargebacks increased due to higher occurrences of fraud. Businesses must face the decision to either absorb escalating costs or pass them on to customers by raising prices. If the former, merchants will eat into their profits, and the latter could alienate loyal customers.

However, these are not the only two options. There are a number of steps businesses can take to lower the total cost of payment acceptance. TechHQ looks at seven actions that will help you regain control over expenses.

Source: PayJunction

1. Use a payment terminal for in-person transactions

Utilizing a payment terminal for in-person transactions significantly reduces the expenses tied to card payments. With streamlined EMV acceptance, these terminals minimize fraud liability, cutting potential chargeback costs. Enhanced recognition capabilities for EMV chip cards also curb fallback transactions, ultimately reducing processing fees.

2. Accept lower-cost PIN debit and ACH payments

PIN debit transactions, characterized by lower interchange fees, lessen the financial burden on businesses compared to credit card transactions. Under the Durbin Amendment, debit card fees charged by large card-issuing banks are capped at $0.21 plus 0.5 percent of the purchase. Credit card transactions are also linked to a percentage of the total purchase and are set at a higher rate.

At the same time, ACH payments have nominal transaction fees relative to paper checks, wire transfers, credit cards, and even debit cards. These should land somewhere between $0.20 and $2 per transaction. Ethical payment processors will be transparent about their rates for both debit and ACH transactions, ensuring businesses can comprehend the cost advantages.

3. Implement AVS prompting and settle transactions within 24 hours to avoid downgrades

Implementing the Address Verification System (AVS) lowers Interchange rates because it reduces the risk of fraudulent transactions. With an AVS credit card match, the merchant requests the customer’s address and ZIP code, and the information is verified with the billing address associated with the card.  The transaction qualifies for a lower Interchange rate, and the enhanced data helps prevent fraudulent transactions.

Settling transactions promptly can also reduce processing fees by allowing the business to avoid downgrades. Delayed settlements often trigger higher Interchange rate categories, and these are common since providers work on small margins, so they intentionally allow merchants to experience them. But, by settling within 24 hours, transactions meet the criteria for lower Interchange rates, effectively minimizing expense.

Source: PayJunction

4. Optimize B2B transactions by supporting Level 3 processing

Level 3 credit card processing captures detailed B2B transaction data beyond standard credit card information. It includes 10 to 20 extra line items, validating the cardholder and the transaction’s authenticity. Level 3 processing qualifies transactions made with corporate or purchasing cards for reduced Interchange rates. Bear in mind that the enhanced data must be added before the transaction settles, and to qualify for the best rates, the settlement must occur within 24 hours of authorization.

5. Choose a provider that offers Interchange Plus pricing

The transaction rate charged to merchants by payment providers comprises a wholesale Interchange fee defined by the card networks like Visa or Mastercard, plus the provider’s chosen margin. Ethical payment providers let customers choose an ‘Interchange Plus’ pricing plan, where the provider’s margin is fixed, in addition to the fluctuating Interchange rate. When the Interchange rate decreases, therefore, merchants gain the savings. With a tiered or flat rate plan, the provider increases its margin on top of the Interchange fee to keep the total fee passed on to the merchant constant.

6. Choose a payment provider with its own payment gateway

A payment gateway is an intermediate technology that captures, stores, and transmits cardholder data from the point of purchase to the payment processor for authorization. When a payment provider offers its own payment gateway, it integrates the necessary processing tools into its services, eliminating the need for third-party middleware or additional services and their associated fees. Thanks to this saving, the provider offers more competitive rates to the merchant, so it is a good idea to choose one that is open about this element of its fee structure.

7. Choose a payment provider that doesn’t charge nuisance fees

Sadly, nuisance fees, like risk fees, PCI non-compliance fees, and customer service fees are extremely prevalent in the payment processing industry. These charges often go unnoticed by small business owners dealing with other responsibilities. The complexity of statements and the business owner’s lack of specific knowledge about payment processing allow unethical practices to continue. It is essential that merchants diligently scrutinize their agreements or seek out providers committed to transparency.

These seven tips to lower the total cost of payment acceptance can all be taken by choosing the correct payment provider early. For example, PayJunction commits to ethical billing, transparent fee structures, and customer-centric practices, allowing its customers to effectively manage and reduce their payment processing expenses. It prioritizes long-term relationships over short-term profits, resulting in fair rates, transparency, quality products, and award-winning customer service.

PayJunction takes pride in educating its customers on how they can lower their payment processing fees and leverage all seven of the tips above. The company intentionally makes its rate plans easy to understand so customers can be confident they are not falling foul of unethical practices and nuisance fees. It offers month-to-month contracts and has no exit fees or startup costs, meaning merchants never feel locked in, retaining the ability to switch providers if they wish. Experience PayJunction’s differences by signing up for a no-strings-attached demo today.

The post 7 ways merchants can lower the cost of processing card payments appeared first on TechHQ.

Running a successful business involves overcoming numerous challenges, from market fluctuations to staffing woes. One survey showed that small business owners’ two most cited challenges are recruiting and retaining employees and inflation. However, the most significant concerns often revolve around maintaining profit margins, particularly when the business is just starting out. Even a minor pricing oversight can eat into profits, jeopardizing sustainability. The same survey found that 14 percent of business owners struggle with a lack of capital and cash flow. Fortunately, there are payment processing solutions available that are dedicated to making your life easier.

Evolution in payment technology

Technology is always changing, but one constant that remains is businesses ensuring that they can offer the best payment experience for both the customer and their staff. Finding a payment provider who is committed to staying at the forefront of payment technology is key and ensures your business benefits from continuous improvements. A cloud-based payment platform is also an important factor that guarantees it will always have the latest and most secure payment connection available. Automated processes and data entry also allow the business to thrive as staff are freed up to focus on customers.

Effortless payment acceptance

Each business is different and many have different payment acceptance requirements to ensure they are meeting industry best practices and customer payment preferences. For example, remote payment acceptance, securely storing cards on file for future and recurring payments, accepting contactless payments, online checkout or the option to email invoices to customers who can pay with a single click. The right payment processing solution will offer a wide variety of payment acceptance options that fit your needs, allowing your business to thrive.

Source: PayJunction

Transparent pricing plans

When there’s so much on the business owner’s plate, it can be easy to miss their payment provider’s small print. Sadly, many unethical billing practices pervade the industry and there’s an assumption among customers that pitfalls thrown at them by payment providers are just part of the deal. Business owners often come to accept that they cannot escape fake or hidden charges because they have become the standard practice and statements are too complex to spot them straight away.

Some common examples are fake credit card processing fees, where the business is charged, say, for non-compliance, for failing to complete a self-assessment questionnaire (SAQ), or to submit their revenue to the IRS. None of these are legitimate fees, but unless business decision-makers have in-depth knowledge of payment processing, most don’t know this.

Other unethical billing practices include not following the terms of the Interchange Plus rate plan that a business has signed for, by adding unnecessary charges like a non-qualified interchange fee or markups. There are also deceptive rate plans worth avoiding, like Billback, where providers charge the business for any transaction that costs more than the proposed flat rate without indicating which ones are affected.

These unethical practices can further exacerbate the profitability challenge, making it imperative for merchants to carefully scrutinize their payment processing agreements. Alternatively, businesses can choose a provider that champions transparency, like PayJunction.

PayJunction is known for its commitment to ethical billing practices, ensuring that business owners can trust it to provide clear fee structures and honest service. Among its core values is a passion for fostering long-term relationships over short-term profits by providing fair rates, quality products, and great customer service.

PayJunction also prioritizes simplicity, making its rate plans easy to understand and its products easy to install and use. This approach not only cultivates trust but also actively supports and promotes ethical payment practices.

Source: Pay Junction

Long-term relationships over short-term profits

Many payment processing providers require customers to sign long-term contracts that bind them for a specified duration. While these can offer stability and lower processing rates, they may also limit a business owner’s flexibility to switch providers if they find better alternatives.

Providers should earn their business by providing excellent products and services. PayJunction offers month-to-month contracts as well as no exit fees or startup costs, and never has in its 22 years of existence. This demonstrates its commitment to a customer-centric approach, ensuring any partnership will be built on mutual satisfaction and transparency.

See for yourself how PayJunction empowers businesses with its commitment to staying at the forefront of payment technology, effortless payment acceptance options, transparent pricing, and flexible contract services by signing up for a no-strings-attached demo today.

The post Streamlining your business operations: How the right payment provider will make your life easier appeared first on TechHQ.