The Best Way to Accept Credit Cards for a Small Business
Are you searching for the best ways to accept credit cards as a small business owner? In any business, interacting with customers and receiving payments for goods and services is part of the day-to-day routine and is vital to remain in operation. Your business depends on cash flow to thrive, and having the right payment processing solutions in place will have a measurable effect on your bottom line. Today we’ll cover a few tips that will allow you to maximize your profits while keeping your money secure.
Determine Monthly Transaction Volume
Before deciding how you would like to accept credit cards, analyze your current transaction volume. The number of transactions your business conducts annually can give you leverage when negotiating rates with a potential merchant service provider. The higher the volume of transactions, the likelier the service provider will be to lower rates to entice you to do business with them.
As a rule of thumb, merchants who have between $10,000 and $250,000 in transactions pay more per transaction than businesses that consistently do more than $250,000 annually. According to a recent article, small businesses that do less than $250,000 annually pay as much as 60% more in fees than the quoted rates received when signing on with a provider. This figure includes annual account fees, PCI-compliance fees, chargebacks, software subscriptions, and hardware leases.
Study How Customers Prefer To Pay
Depending upon the nature of your business, specific transaction methods will make more sense than others. For instance, if you’re a contractor who performs services at different locations, it would be wise to offer mobile payments to your customers as you’re out in the field. If your business is brick-and-mortar, you would need to have POS systems in place at your location to conduct transactions on-site. And if you have a web presence, you would need to have a payment processing option that allows customers to perform transactions online.
Whichever processes your customers prefer should play an important role when deciding on a payment processor. While your objective is to pay the least amount of credit card fees possible, you never want to make it harder for customers to pay you. You want the transaction process to be as easy as you can for the customer, so they’ll want to continue to do business with you. Never make the customer jump through hoops to pay you. If you do, the customer may become dissatisfied, and you’ll lose the opportunity to gain repeat business.
Compare Rates & Do The Math
After crunching the transaction numbers and figuring out which payment processing solutions are best for your business, compare payment processing companies to see what transaction rates are available. Accepting credit cards online is less complicated once you do the math and understand what technology is a must-have for your business and what types of equipment are not necessary.
A great way to offset transaction fees is to raise the prices of goods and services by 3% across the board. Look at your payment processing as a cost of doing business and incorporate it into your pricing, and it will no longer be an issue. Think about it this way: If your supplier raised prices on their end, wouldn’t you have to raise your pricing to the customer? View credit card transaction fees in the same light, and you can write them off as an expense on your taxes.
Choose the Correct Fee Structure For Your Business
The average credit card transaction fee will be roughly 3% per transaction. However, the number of transactions and the amounts can drastically affect the monthly costs of doing business. For example, if your operation typically does a lot of smaller transactions, a flat fee would be more appealing than paying the percentage rate plus 15 cents per transaction. For a business that processes fewer transactions at large amounts, a flat fee may not benefit them as much as other available pay structures.
If you’re doing more than $250,000 annually, many processors will give you lower rates if you commit to doing a specified number of transactions per month. The most important thing to remember is that you should always crunch the numbers to see where the savings are so you don’t waste money because you didn’t do your homework.
Verify Integration Capabilities
As a small business owner, you are likely using a software solution to keep the books or a CRM tool to manage customers and prospects. If you are utilizing these tools, you’ll need to be confident that the payment processing solution you choose to implement can seamlessly integrate with your other software so that everything runs smoothly. Doing so will keep you from having unnecessary headaches, and you’ll be able to keep track of transaction data to identify potential opportunities to expand your business.
With the tips we’ve just covered, you can confidently choose a new payment processor or switch to one that is a better fit for your business. Take the time to implement these steps, and you’ll save more on your processing fees and increase your bottom line.
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