Merchant Services
Published November 03rd, 2016 by

How to Take Advantage of Merchant Services Without Breaking the Bank

How to Take Advantage of Merchant Services Without Breaking the Bank

There are undeniable advantages for both businesses and its customers coming from cashless transactions that use credit and debit cards. Not only that it is fast and convenient, it also broadens your services, and puts more value to your products and to your business as a whole. Getting merchant services allows you to be in the loop, as far as the popularity of electronic and mobile payments and POS solutions to customers are concerned.

Shifting to technology-based payment processing services might intimidate some, both in the aspect of cost and complexity of use. With the right guidance from reputable merchant service companies, you should be able to understand the process quickly, and you can start reaping its benefits in no time.

Benefits of Merchant Services

The rising popularity and the tremendous opportunities for more revenue streams and growth in customer base should convince you in getting merchant services for your business. Aside from that, you can also have the following benefits:

  1. Wider payment options

Customers are becoming more discriminating with their needs and preferences. This is the same case with payment processing options, and the use of credit and debit cards are starting to become the new “norm”. Widening your options means you have the capacity to capitalize on ways to promote your customer service. For your customers, this could mean that your business can be trusted and relied on.

  1. Increased opportunities for revenue

Businesses must take advantage in broadening their services as much as possible, to ensure they will capture a wider customer base for more revenue opportunities. When customers trust your services, you can make them loyal to you, which may even extend to their families and friends. With so many competing businesses offering the same products, customers often turn to those that will give them excellent and satisfying customer service. In fact, according to an American Express Survey on consumer statistics, 70 percent of American consumers are willing to spend more for businesses that can offer them excellent customer service.

  1. Better cash flow management

Electronic payments can help you in conducting better accounting of your sales. Processing credit and debit cards in POS systems as well as online payments will also make your revenue acquisition streamline with your other business transactions. This way, you can have a more visible audit trail to follow, making you more organized in managing your cash flows and stabilize your accounting management.

  1. Spares you the hassle of bounced checks

By opening up your business to accepting electronic payments, you may discourage your customers from paying using checks because you can provide them more options to pay. It also minimizes your risk in handling bouncing checks, and spares you the hassle.

  1. Completes a customer journey and experience

Providing more options, and making it fast and efficient, will give your customers a complete and satisfying journey and experience dealing with your business. The flexibility of your services will create more happy and returning customers. Customer service is an important aspect of your services, which can open more opportunities for growth, expansion and revenues.

However, many businesses are not maximizing the benefits of merchant services because they feel burdened about the fees and charges that come with it. But one cannot simply bypass implementing it, because it can cost you your customers, and even those potential ones. The good news is you can actually lessen the costs you need to pay. Follow through this article and know the ways on how to save up a lot with merchant services, but first, you should understand how its fees are structured and understand what these fees are intended for.

Merchant Service Fee Structure

Since it is purely a service, it is hard to quantify its value unless you implement it for a long time. When you observe growth – both in the number of customers you now cater to, and the volume of sales you process after implementation, that is when you may say that you are benefitting to it. Profits are not the actual measure of success for merchant services, but having a steady revenue stream and a wider customer base is.

Basically, merchant services become expensive because of the many areas in which the provider can sneak in the fees. And these fees vary for many reasons and considerations, about a 125 categories, which you can find difficult to forecast and quantify. The fluctuating nature of the fees involved in merchant services influences its complexity. But here’s another good news, you don’t really need to digest an in-depth version of it, only the basics will suffice.

What are merchant service fees? These are usually grouped according to the following categories:

  1. Interchange fees

These are the fees marked on a per-transaction basis, according to the different pricing models that merchant services use. The most common models are cost plus, blended rate and tiered pricing. It is normally split between the service provider and the credit card issuing bank. Interchange fees also vary depending on the category that your business belongs, therefore causing its fluctuating nature.

  1. Base fees

These flat fees are also considered as surcharges, and are independent of the amount of transactions that your business process. These are also fees on top of the interchange fees, and usually cover for charge backs, ACH and decline fees.

  1. Subscription fees

These are also fees that are independent of the transactions and its amount, and usually cover annual fees (if any), regular maintenance fees, and PCI compliance fees.

Ways to Save

At this point, you might have convinced yourself that merchant services will fit into your business model. You also have the basic understanding of the fee structure that merchant services implement. Now is the time to seek more ways to save a lot on merchant services.

  1. Research and compare providers

Before researching for providers, set a criteria and a list of features that you don’t want to compromise for your merchant services. Next, you may start looking through the internet for merchant service providers. But do not settle with what you see in advertisements. When a company caught your eye, inquire more about their services, initially through a phone call. Ask the right questions, request for a copy of their terms and conditions, but do not decide yet.

The market for merchant service for small business and enterprises alike is robust with options, and is flexible to accommodate different types of businesses according to size or industry. It is better to exhaust your choices first before deciding for that one which you can partner for a long time. Make sure that you understand, at least the clauses about fees and contract period, prior to signing up. It pays to be an informed client, and it can save you more by knowing what to expect.

  1. Practice your negotiation skills

It pays to have good negotiation skills, because you can make the tables turn so that the merchant service provider will want you instead of you needing them.

Encourage them to lower the fees by putting more value to your business. You can do this by leveraging a huge volume of transactions that you can facilitate. But make sure you can really process the number you commit, or else you will still pay the default high fees.

  1. Swipe!

It is generally more expensive to process payment transactions where you manually enter the card holder’s information than when you swipe the card in the terminal, according to merchant services for quickbooks. The reason is that manual entry makes the transaction more prone to fraud than card-present transactions, which involves swiping and signing a receipt. While e-commerce is gaining popularity nowadays in which you can actually save a lot from capitalizing on a physical store, it is still best not to just drop your shop and still continue processing payments in your POS solution system.

Train your shop’s cashiers to swipe the credit or debit cards as much as possible instead of doing manual information entry. If they suspect fraud, they can always ask for a valid ID that holds the information which matches that on the credit card.

  1. Avoiding leasing your equipment

Some merchant services will offer you to lease their equipment in exchange of a long term contract or additional fees. As much as possible, refrain from renting equipment, like Point-Of-Sale or POS terminals. This may cost you more in the long run than purchasing your own.

Another important thing to take note, is when you decide to purchase an equipment, make sure that it can accommodate newer technologies which, when fully implemented, will cause older equipments to become obsolete. In October 2015, all merchants were required to update their system and terminals to be EMV compatible. Double check if what you will purchase is capable of processing cards embedded with the EMV technology.

Finding the Right Merchant Service Provider

Not all merchant service providers are created equal. That is why it is important to weigh in your options first before settling with one. Getting a merchant account may require you to stick with one provider for a certain period time depending on what is stated in the contract. This should make you think many times before entrusting a crucial part of your service to a provider that must be trustworthy and credible at the same time.

The best merchant service providers should give you the right information about the agreement you are about to enter. It should prioritize your actual needs, and your capacity to sustain the service for a longer period of time. The market for merchant service providers is robust with options, but you have to be aware that shady practices and false advertising are still rampant in the industry. To avoid falling into one of their traps, be an informed business owner and be diligent with your research and decisions.

Need more help in choosing the right service provider? See these reviews of merchant service providers from

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