Businesses generally contract with merchant service providers to be able to accept payments by credit or debit cards. There are several types of payments possible, for instance through aggregators like PayPal or directly through a credit card terminal linked to the bank via a telephone line.
When payments are made by credit card for instance, merchants do not receive the full amount of the purchase, as they must pay fees associated with processing the card. This is why sometimes buyers are asked to pay a small fee on top of the price of their purchase.
With chequebooks disappearing (or in some countries, already a thing of the past) is no escaping this cost category. The merchant account opened by businesses to process payments generates fees; however various merchant card providers have different fees structures and the variety and periodicity of those fees is such that it makes it difficult for businesses to follow and control expenses in this cost category. Yet, these fees, which represent usually 2% to 5% of the total amount charged, could greatly be reduced and help the company achieve significant savings.
There are several fees associated with a merchant account, such as an application fee to open an account, an annual fee to maintain it, an interchange fee to establish communication with the bank to authorise payment, a fee for each transaction etc. Often these fees are presented as one, which makes it harder to understand and negotiate – especially for SMEs. Bigger businesses with millions of transactions are better equipped to negotiate with merchant card providers.
The solution? An external merchant card specialist will bring businesses, especially SMEs, the unbiased and rational approach needed. With an in-depth knowledge of the market and an extensive database at their disposal, this expert will be able to advise on every aspect of the service: lease or purchase of the processing equipment, rates, refunds, penalty clauses, monthly minimum or maximum amounts processed, termination conditions and waive unnecessary costs.
Having investigated the company’s spending and the actual needs, the specialist will help provide the best services from merchant card providers and achieve savings.