It never fails to surprise us that 90% of the merchant statements we analyze have hidden fees and excessive processing mark-ups. Most business owners take great measures to ensure they are not overpaying on inventory and taxes – but few realize that the wrong payment processing option could be just as costly.
With so much at stake, why do most businesses still overpay for processing?
- Many mistake their bank for their payment processor – Most well-known banks and billing companies are not payment processors, even though it might appear like it on the merchant statement. Your merchant statement might show a well-known bank logo, but on closer examination it’s evident that the bank is just reselling and marking up another company’s processing. Since services are resold, the mark-up amount can vary from agent to agent, leading to extremely high fees. In addition, customer support is often outsourced and lacking.
- Flat-rate per-transaction pricing is just so much easier (and expensive) – Many popular payment processors charge flat-rate per transaction fees– which is easy to understand. The issue with this approach is, however, that the Durbin amendment qualifies debit cards for much lower processing fees than credit cards. Flat-rate per transaction programs do not distinguish debit and credit card transactions, resulting in much higher processing fees.
- Merchant Statements can be very confusing – With over 150 wholesale costs to understand, many business owners are reluctant to review their statement. This is why we recommend having your merchant statement professionally analyzed in order to find common hidden fees and mark-ups.
- Poor customer service means higher cost – Not all merchant service providers are created equal. We highly recommend researching merchant service firms before making a decision: How are their reviews? What is their approach in setting you up with a new payment processing system? Will they offer high quality customer support whenever you need it? Do they have a PCI/EMV compliance program in place, or will they let you be out of compliance so that they can charge more on processing fees? (Something observed in about 70% of the statements we review)
As with anything in life, the first step to solving a problem is awareness. In today’s pandemic business landscape, exploring your payment processing options can make a big difference in recovering your bottom line.
For a limited time, we would like to offer you a free merchant statement analysis with one of our Payments Specialist.Written By: Gina Smaili, Product Marketing Specialist