You may not know that business owners no longer have to automatically pay for credit card payments. (Which can be as high as 5% – which is plain robbery.) Merchants and business owners are now able to apply a fee when customers choose the option to pay with a credit card. Here are several reasons why you want to pass the fee on to your customers.
1. Reduces Business Deductions
Find a partner who is a cooperative processing provider. One who is up to date with the rules and is compliant with them. It is worth doing your research to find the type of providers who don’t lock your business into long-term contracts, at fixed rates, which may eat into your business profits. The way to determine this is to ask for documentation reporting their compliance to pass on credit card fees. There are a lot of companies available online that are readily available. It also helps to go through Credit Card Reviews in order to find the right credit cards your customers are likely to use – maximizing transaction fees that occur with the provider’s choice of technology.
2. No Fuss, No Muss
It is important, in this pricing model, to be as transparent as possible by stating so. This means that, during the check-out process, you will state that the price is “$25.00 plus a 2.9% surcharge for credit.” This surcharge (again, provided by a compliant provider)benefits customers of yours who use debit cards, as well – although there is a much smaller fee for your business to pay.
3. Tools Make Things Easier
In order to reduce the price to pay for credit card transaction fees, there are several useful tools to consider. When you want to automate the credit card payment process for your business, there are payment gateways like Payoneer that lets you receive recurring, bulk or single payments from customers. There are no transaction fees, but it is solely to be used within the United States – payment transactions from outside the country do not work.
Authorize, a payments getaway for international and global transactions, lets you accept all major credit cards, eChecks, and signature debit cards. There is a $49 set up fee as well as a monthly $25.00 gateway fee. There is also a 2.9% fee per transaction.
Square, a credit card processing company, lets small businesses accept credit cards sans fees. They even allow business owners to process gift cards (in compliance with the Square app). There are no set-up or monthly fees, and a 2.75% fee per swipe.
4. Bring Down Costs
If you want to bring down costs, as well as adding transparency to the payment process, pass the credit card fee on to customers. With the amount of transaction fee percentages that your business may be paying for—which could be extremely costly if your profits are only in the single digits—not doing so means you will be closing your business shortly.
Like the famous “Oracle of Omaha”, Warren Buffett said, “Someone’s sitting in the shade today because someone planted a tree a long time ago.”
What you do today will have an impact on people’s lives years from now. The decisions you make about your business will affect the lives of future customers and future employees as well. Whichever choice you decide for your business, be sure that you will be satisfied with that decision a long time from now.