From inventory and equipment to rent and employees' wages, there is a never-ending list of expenses that comes along with owning and running a business. However, it is possible to cut costs. Take your credit card processing services, for example. The cost of credit card processing varies, depending on several factors, including the amount your business processes a month and your merchant services provider. Consequently, decreasing spending on this part of your business can result in extra capital to reinvest in others.
Here are several suggestions about how to lower the cost of credit card processing:
Merchant services providers often sneak in hidden fees at high rates on their clients' credit card processing statements. One way to learn if you’re being overcharged is by comparing the cost of your current provider to that you'd spend if you switched to another. This can help you make an educated decision. But first, you'll need to calculate just how much you’re paying in credit card processing fees, and then, conduct some research on other well-known, reputable merchant services providers. If you discover you are, in fact, paying more than necessary, either change providers or negotiate with your current one.
Consider Other Pricing Systems
If you haven’t already, look into the different pricing options offered by your provider. Here are the top three:
Charge breakdowns vary for each pricing model. As a result, there may be one more cost-effective than the others. If you’re not completely clear on what would be the most beneficial for you, contact your provider or another reliable merchant services expert, and learn about what each pricing system entails. Typically, the answer lies within your credit card processing statement, though those are notoriously difficult to comprehend.
Reduce Chargebacks – Reduce fraud (See Below)
Chargebacks are consumer refunds following a disputed charge on their credit card bill—typically because their card information was stolen. While it’s near-impossible to stop every chargeback case from occurring, as some people knowingly dispute purchases they themselves made, merchants can decrease the amount of claims they have to deal with by turning their attention to fraud prevention. Doing so reduces the likelihood of hackers stealing consumer information from their place of business, and thus, associated reimbursements to customers and chargebacks to their merchant services provider.
Become PCI Compliant
One way to avert fraud is to become PCI complaint. The Payment Card Industry Data Security Standards (PCI DSS) were developed more than a decade ago for this very reason—protecting consumer information and helping avoid data breaches and chargebacks. For a business to become PCI compliant, it must meet certain requirements. This includes having a vulnerability management team to implement anti-virus software and maintaining an information security policy employees must adhere to.
Adopt EMV Technology
Similarly to PCI compliance, EMV (Europay, MasterCard, Visa) compliance helps fight against data breaches and improves consumer card information security. While adopting EMV isn’t a requirement, it would certainly be advantageous for merchants to do so. Plus, since many consumers today have credit cards with EMV chips, they may be hesitant to shop somewhere that doesn’t yet utilize this technology.