In the current business environment it is increasingly difficult for many companies to survive let alone thrive. It simply does not matter how large or small the organization is, nobody is safe from failure these days. Even the largest companies are at risk of going under on a daily basis. Just take a look at Blockbuster Video, Borders Books, and most recently Sport Authority. Depending on when you are reading this article the gigantic sporting goods retail chain is either about to or already has closed their doors forever.
As a smart business owner or manager you are constantly on the look out for new ways to cut costs in order to significantly raise your profit margins. The good news is that there are a plethora of business savvy moves that you can make in order to accomplish just that. Always keep in mind that saving money is just as profitable as earning it. Remember that famous Benjamin Franklin quote, “a penny saved is a penny earned.” Although Mr. Franklin spoke those words over two hundred years ago they most definitely hold true to this very day.
There certainly are plenty of more than obvious ways for companies to save money. Chances are you have heard most if not all of them before. You are most likely are already shopping around for the lowest prices on office supplies, entering into the best deals on computers, smart phones, and other electronic devices with authorized re-sellers, and of course hiring the most qualified personnel at the lowest salaries that you can get away with just to name a few of the most well known suggestions.
Although those methods are all sound business advice that should be followed, in order to truly profit business owners and managers need to dig a lot deeper than that. There is an extremely unique way for businesses to save money that is far more creative than paying half price for new office chairs.
Eliminate The Fees Associated With Accepting Credit And Debit Cards
In the good old days cash was king and ruled the world. People used it to pay for everything from small everyday items to large purchases such as cars and even homes. Those days are certainly long gone, and probably will never return. In this day and age customers prefer using both credit and debit cards to pay for most if not all of their purchases. This fact, or more accurately way of life has forced the hand of business owners to abandon their cash only viewpoint.
Those that have yet to conform are at serious risk of forcing their valued customers into the arms of the competition. However, by accepting credit cards it makes it far easier for companies to conduct business with their customer/client base, and even boost sales by attracting new customers or clients. That being said there is a cost of doing business this way. It is crucial that business owners and managers have a complete understanding of the fees associated with the right to accept credit and debit cards as forms of payment.
Businesses of all sizes typically must pay a small processing fee in order to accept credit and debit cards. This fee runs anywhere form 1.95-percent all the way to 5-percent. Although this may seem like a small amount at first glance these fees add up extremely quickly, especially for companies that process many credit and debit card transactions on a daily basis. The average fees charged to a retailer that physically swipes the credit and debit cards in person ranges from 1.95-percent to 2-percent.
This figure increases to 2.3-percent to 2.5-percent for credit and debit card purchases made online or over the phone. Some merchant account companies actually charge small business higher fees because they account for less overall business. In this case credit and debit card processing fees may reach upwards of 5-percent of each and every purchase. For example, 5-percent of a $1,000 purchase is a whopping $50. Multiply that over a few dozen transactions and you can easily see how the credit and debit card processing fees becomes a major expense to the business.
Understanding the fee structure is key to managing credit card fees. When a customer or client uses their credit or debit card to make a purchase there are three parties that the business must pay. The first is the customer or client’s bank through the interchange fee. The second is the credit card company through the assessment fee. Last but certainly not least is the credit card processing provider through the transaction fee. If that seems like a lot hands in the till it most definitely is.
How nice would it be to live in a world where your business could actually accept credit and debit card payments without having to pay those outrageous fees? Just imagine for a second that your customer or client could make that $1,000 purchase on their credit or debit card and instead of paying the $50 fee, as listed in the example above, it cost you absolutely nothing. The good news is you do not need to imagine that scenario. Your business may very well be able to take part in it.
Of course the interchange, assessment, and transaction fees must be paid, it simply breaks down to a matter of who is paying for them. This is exactly where convenience fee payment processing, also know as free payment process comes into play. In essence, it is a method of building all of the processing fees into the purchase price of products and or services. This is by far the best method for a business to save money because there is absolutely no cost to the biller.
Federal and State laws in conjunction with the acceptable practices that the major credit card companies, such as MasterCard and Visa allow limit the type of businesses that are able to pass the processing fees onto the consumer. For example, billing and collection agencies, hospitals, medical based offices, telecom companies, and the utility industry to name a few are all allowed to incorporate free payment processing into their credit and debit card transactions.
Due to the array of complications, it is vastly important to only work with a payment processing company that is an expert and specialized in the convenience fee arena. For further information regarding saving money through the use of free payment processing please contact the experts at www.MyPaymentSavvy.com.