Saving Money With Your Merchant Account

It is extremely important to save as much money as possible and that is why our office decided to offer you some money saving tips with your merchant account. You will save hundreds if not thousands of dollars on your merchant account fees, so take a few minutes and read.

STEP 1

Take a look at your merchant statement and look at the total fee amount deducted from your account and get out your calculator. Ok, now put in the total fee amount and divide that into your gross credit card volume for Visa, MasterCard and Discover. Once you have figured our your overall percentage deducted, now you can figure out on a monthly bases how much money you’re really saving. No matter what your rates are look at your total fees and follow this formula as some payment processors will tell you everything you want to hear including the lowest rate pitch…

Example:

Total Merchant Fees = $2,455.76

Total Gross Credit Card Sales = $101,322.02

2,455.76 / 101,322.02 = .0242371 or 2.42% (percentage deducted)

STEP 2

Now figure out what kind rate scale you’re on. You have tiered rates (qualified, mid-qualified, and non-qualified), flat rates (all bundled into one rate), and interchange plus which gives merchants true rate cost per card type plus a flat mark-up. Merchant statements are very complex today and hard to understand mainly because your current processor doesn’t want you or competitors to figure out the fees. If you still cannot figure out your rate scale then call your payment processor and ask for customer service or the billing department they have to by law disclose this information to you.

STEP 3

Once you have figured out the above information now you are ready to start saving money. No matter how you accept each credit card sale we’ve got you covered. Take a look below and determine what fits your transaction acceptance.

Face-to-Face Merchants

Interchange Debit vs Pin Pad Debit on a $29 dollar sale

Does your business accept pin debit based cards, if not this payment solution could save you a ton of money and add check cards without the Visa and MasterCard logo. Pin pad sales are the safest transactions to accept in the electronic payment world, so not only will you save money you will have a high level of security that almost eliminates any kind of fraud and unnecessary chargebacks. As long as your debit card sale is over $25 dollars you will save money on each transaction.

Visa Debit Interchange Plus: 1.03% + $0.15 (interchange) + .0925% (dues & assessments) + .29% + $0.09 (ubc and communication) = $0.65

NYCE Pin Debit Plus: .75% + $0.15 (network cost) + $0.15 (ubc and communication) = $0.52

SAVING YOU $0.13 PER TRANSACTION

PLEASE NOTE: Every payment processor shares the same interchange rates and debit network cost. Now some payment processors try to manipulate debit fees by showing only the transaction fee over network cost and describing network fees as something else to confuse competitors and the merchant. Click Here (pdf) for debit network cost.

Why is my system asking for the tax amount?

Most credit card systems today are set-up with all of the necessary prompts and security parameters. When your system asks you what the tax amount is what do you do? Most merchants press enter and bypass this prompt which can be a costly mistake. It seems like you are adding money on to the card holder, but your not. As a matter of fact you’re saving money by adding the tax amount and you are not adding any extra money on to the transaction all you are doing is recording corporate and business credit card transactions. By adding the tax amount everytime even if the tax amount is zero fill it in and you will qualify for the lower interchange rate as long as you are using interchange plus (aka cost plus). You will save an average of .20% (20 basis points) per transaction which can add up. So the next time you see your system ask for the tax amount add it and save.

These are some saving money tips for merchants that transact face-to-face sales. If you have any questions click here.

Pay At The Pump Merchants

SIC Code vs Typical Set-up

Merchants and even agents overlook this set-up and often select a retail application. This can be a costly mistake, because pay at the pump merchants make very little profit so the set-up needs to be correct. Make sure your payment processor sets you up as a pay at the pump merchant by SIC code. Also ask for Zip Code AVS as this will add a security feature to your system and help prevent fraud.

These are some saving money tips for merchants that transact pay at the pump sales. If you have any questions click here..

Key Entry Merchants

AVS vs CVV2 Code

AVS (Address Verification System or Address Verification Service) is a vital
service that all key entry merchants should use. The AVS service verifies the card holders address using the billing address box number and zip code, sometimes just the zip code is prompt and that still qualifies as AVS. By using AVS you will cut the risk of fraud down substantially, however you can still bypass the prompt if you trust the customer and the address is a mismatch. You will save money everytime the address is a match when using interchange plus rates. The average savings is .20 – .30% (20 to 30 basis points) per sale when AVS is a match. CVV2 Code adds security to your transaction and cuts down on chargebacks and fraud, but it does not qualify you for better interchange rates, it only verifies the last 3 or 4 digits of the back of each credit card. It is added security so it is worth it and it can save you time and money on disputed charges.

How to stop unnecessary chargebacks?

Before you ship or provide any services for your orders, you should require a signature on the credit card receipt itself or on an invoice. By getting the card holders signature you have proof that they did indeed order your product or service. You can fax, scan, and/ or send your receipt / invoice by mail and if the card holder refuses this option that should give you a good indication that something is wrong. Keep in mind it only takes a few bad sales to wreck your business or do substantial damage to your cash flow.

These are some saving money tips for merchants that transact key entry sales. If you have any questions click here..

Online Merchants

Stop fraud before it happens

Before your order goes to the final checkout from your shopping cart add a warning message, but make sure you have the necessary features to do so. Enable IP Address logging to verify where sale came from then make sure you enable AVS, CVV2, and other security parameters if available to protect yourself and the rightful card holders information. When you enable these security features you will save money per credit card sale and almost make fraud impossible from happening.

Make sure your payment system is PCI (Payment Card Industry) Compliant because your business maybe held accountable for any security breaches if they should happen. PCI Compliance is what the Payment Card Industry uses to manage fraud risk and it makes the payment processors accountable per product and service. All payment processors have to be a member of PCI-DSS (Payment Card Industry Data Security Standard) and pass on the information to its clients to help them become compliant.

These are some saving money tips for merchants that transact online sales. If you have any questions click here..

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