Today’s guest post is by Cheryl Garabedian, a 23+ year veteran of the credit card processing industry. Her site, AcceptMobileTransactions.com, is dedicated to helping entrepreneurs find the best small business credit card processing option for their unique situation.
In today’s economy, it is important for small business owners to eliminate unnecessary expenses wherever possible. After all, it just makes good business sense to keep operating costs under control in order to boost profit margins. Throughout the course of my 23-year career in the credit card processing industry, I have shown thousands of small business owners how to improve cash flow, while keeping costs in check.
Of course, the ability to accept credit card payment is now a necessity. Fact is, most of your customers expect to be able to pull out their credit or debit card for everything from groceries to oil changes to major home repairs. As a result, accepting credit card transactions is a necessary part of operating a business.
Here are 3 of my favorite tips to save money on credit card processing fees:
1. Be Skeptical of “Free.” Too often, I find merchants who were lured into accepting unfavorable credit card processing terms with false or deceptive promises of “free equipment” (or worse – “free merchant accounts.”) In my experience, “free” equipment almost never is. While it may be tempting to save a few hundred dollars on a new terminal, you often end up paying for it many times over in the form of higher transaction costs, minimum monthly fees and other unnecessary charges.
Instead, be sure to look at the whole picture before making a decision. Get a clear picture of the transaction rates and monthly fees* you’ll be charged in writing. Also, look into purchasing your own equipment – it is possible to find relatively inexpensive, reliable and PCI-compliant terminals by doing your homework – or working with a reputable merchant account provider. (Refurbished equipment that comes with a guarantee is also a great way to cut costs).
(Note: I wouldn’t agree to any contract which tries to lock you into monthly minimum fees).
Another popular alternative is to convert your mobile phone into a mobile credit card terminal. For example, for around $125, you can purchase a credit card encryption sleeve which slides over your iPhone to instantly accept credit card transactions. This option is a great solution for on-the-go entrepreneurs, such as trade professionals, business consultants or crafters/artisans.
2. “Swipe” Transactions Whenever Possible. Physically “swiping” a credit card at the point of purchase almost always carries lower transaction costs than manually entered (or “keyed-in”) transactions. This is because “swiped” transactions simply carry less risk of fraud or human error. This is a main reason why converting an iPhone or other mobile device into a mobile credit card terminal is such a great option for business owners, like roofers, marketing consultants and craft/trade show vendors who conduct the majority of their transactions away from their office or studio.
3. Ask for Separate Pricing for Debit Transactions. Debit card transactions cost less to process than credit card transactions. Therefore, if your business accepts a lot of debit card transactions, you may be able to save a significant sum of money by having debit cards broken out from credit card transactions in your contract. Unfortunately, many credit card processing reps tend to bundle them together because it is more profitable to do so.
Tip: When talking to a potential merchant account provider, ask if they offer “6-tier ” or “Interchange plus” pricing options. Some may only offer 4 tiers, but what matters is that they are willing to break out swiped debit transactions from swiped credit card transactions.
And now I would like to offer you a complimentary, no-obligation review of your current merchant account to recommend ways you may be able to keep a little more money in your own pocket. To get started, simply contact me via phone or email today!
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