Like it or not, we may be facing an economic downturn. Which means, there is no better time to review all expenses and find those “hidden gems” of savings in the business.
If you sell products or services on your company website, there may be opportunities to create efficiencies and reduce fees in your merchant processing system. However, navigating the array of options can be confusing and time-consuming for most small business owners.
We spoke with Joey Kaufman, Paid Search & Marketing Strategist with Evolve. Joey explained that merchant processing can be an abstract concept for some small business owners.
He recommends asking prospective merchant payment processing partners these 3 questions:
Do you have integrated payments?
Integrating payments with your ERP system can help increase productivity and efficiency while decreasing costs.
Integrations can provide more accurate real-time data, leading to data-driven decisions that result in better customer experiences. The idea is to bring together data for sales, payroll, and your bank account, making it easier to track and report transactions and decrease friction in those transactions with customers, employees, bank and credit card companies.
In addition, rather than designating finance and accounting employees to manually enter or reconcile transactions, they can be redeployed to mission critical responsibilities.
Are you Payment Card Industry (PCI) compliant?
PCI compliance or the Payment Card Industry Data Security Standard (PCI-DSS) a standard major credit card companies like Visa and Mastercard use to protect themselves and their merchants from fraud and cybersecurity breaches. While failing to comply with PCI-DSS isn’t illegal; you may be subject to penalty fees if you are noncompliant.
Among other benefits, PCI-DSS helps to mitigate the risk of lawsuits and fines related to data breaches and hacks, identifies system vulnerabilities before they’re exploited by hackers, and will help to qualify a business for insurance coverage by meeting policy requirements.
Are you qualifying or submitting data for level 2 or 3 interchange rates?
Credit card companies are risk averse. In fact, when dealing with companies that lack adequate transaction data, credit card companies charge increased rates; the more data, the lower rates.
Level 1 requires the least transaction data, but credit cards charge the most interest for these transactions. Data at level 1 includes credit card number, expiration date and transaction amount. Level 2 requires level 1 data as well as invoice/order number, tax amount and zip code. Finally, level 3 requires merchant tax ID and several product or service details, but offers the lowest possible interest rates.
Your merchant processing partner should provide valuable insights by offering unique recommendations tailored to your company. They should be able to predict potential business fraud, and they should advocate for you by continuously optimizing your rates and uncovering savings.
For help mining these hidden gems of savings, contact a merchant payment processing professional or ask your trusted financial advisor for a referral.