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No matter what position a merchant is in, he or she will always be concerned with finding ways to cut excessive costs while still offering superior service. As credit card companies slowly increase the fees they charge merchants to accept their cards, business owners are looking for ways to avoid passing these costs on to consumers, such as by switching their
credit card payment processor. Accepting a credit card payment involves the actions of several players, and merchants can take steps to reduce costs with most of these players. Many of the best ways involve a closer scrutiny of the fee structure and the ability to negotiate with the providers of their
business accounts in Canada, to get the right rates for their specific type of business.
Paying attention to rate levels and comparing them to the type of business is an effective strategy for a number of reasons. Credit card payment processors often charge a percentage rate on every transaction, a fixed, per-item fee on each transaction, or a combination of both. Percentages are more costly for merchants that sell expensive items. For example, two percent of 10 dollars is virtually insignificant, while 2 percent of a $700 television is $14. On the other hand, fixed fees per item are more painful for merchants that sell inexpensive items, because a consistent 15 cents on every seven dollar purchase equates to another two percent, while that same 15 cents on the TV is only .02 percent. So negotiating these numbers based on the type of transactions a merchant does can make accepting credit card payments far less costly.
With so many different parties taking a slice of each purchase – the card issuer, the credit card association, the credit card payment processor, and the merchant gateway provider for online payments, just to name the biggest – monitoring fees and requiring that the payment processor make that information available is the only way merchants can know exactly where their money is going. Without that knowledge, decreasing costs to a legal and fair level is virtually impossible.
The list goes on, but the point is the same; paying close attention to fees and fee structures, while time consuming, is a very effective strategy for merchants that want to reduce payment processing costs.
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