5 Easy Ways to Reduce Your Merchant Services Fees

Although the payment card industry becomes more complex every year, that complexity often leads to opportunity. Following these five tips will ensure that your expenses stay as low as possible.

Special Industry Rates

There are nearly 30 specific business categories that have special carve-out rates from the networks. If you are in one of these lines of business, make sure your merchant services provider is helping you qualify for these rates.

Settle transactions in a timely fashion

For most merchants, every transaction you process must be settled within 24 hours in order to ensure it qualifies at the best rate.

One of the easiest ways to guarantee this is to either switch to a host-based settlement solution or to have your processing mechanism automatically settle at a specific time of day.

If the transactions are settled between 24 and 36 hours, they will likely downgrade to a higher rate, called Electronic Interchange Reimbursement Fee (EIRF).  If settled after 36 hours, the transactions will downgrade to one of the highest rates, Domestic Sales Credit (Standard).

To summarize:

• • • • within 24 hours = best rate
      • 24 – 36 hours = EIRF downgrade
      • 36+ hours = Standard

Answer any and all prompts for information

When processing certain types of cards (corporate/business cards), or in certain fashions (online for example), you may be prompted to provide information like the customer’s billing address or an invoice number.

All of these prompts, although sometimes aggravating, are there to make help mitigate fraud or to improve the financial tracking efforts of accounts payable departments.

Either way, by simply attempting to provide this information, your transaction will qualify at the best possible rate. For example, although the address you supply might not match what the card issuer has on file, you still receive the best rate for submitting the information.

Use Current and Industry-Appropriate Processing Solutions

The biggest advantage of using current and industry-appropriate processing solutions is that they are designed to leverage certain advantages.

For example, a restaurant needs to utilize solutions that allow the amount of the transaction to be adjusted for tips. Hotels need to be able to pass through check-in and check-out dates (folio data). Companies whose customers are strictly other businesses or government entities need to be able to pass through “Level 2″ and “Level 3″ purchasing card data.

By sending through this specific information, businesses are able to qualify their transactions at these industry-specific rates mentioned in #1 above.

Avoid Billback and Enhanced Billback pricing schemes

Many Independent Sales Organizations (ISOs) and large service providers use a billing scheme called Billback or Enhanced Billback. These pricing schemes are specifically built to disguise fees that you may not be aware you’re paying for.

The appeal to these schemes is the low, advertised flat rates (e.g. 1.69% + $.25). A careful review of your statement will show additional rates charged in a “penalty table”. However, this penalty table isn’t for the identified month’s transactions, it is usually transactions for the month before! So, in order to figure out what your total costs were for processing sales in December, you need your December statement AND your January statement!

This is currently the most odious and troublesome pricing schemes in the industry; and is one that has led to a lot of mistrust, resentment, and buyer’s remorse.

ABOUT US

Motus Financial, located in Sun Prairie, WI provides Point-of-Sale (POS) technology solutions and credit card processing services. Locally owned and operated Motus Financial provides a complete suite of POS technology services to assist merchants in processing payment from credit cards, debit cards, and checks.  Motus financial can also provide check processing as well as a customized gift card program for your business.

For more information, please contact us at 608-819-8666 or check out our website at www.motuscc.com and we look forward to assisting you.