HOT NEWS!

Small Ticket Business Can Save Big!
Card Processing Can Cost Less For
Specific Business Types

     As a news story I cannot think of a better example of proper categorization of business codes than the example a rep recently showed us. I will simply relate the figures here.

     He was examining the statements of a business owner that owned a chain of 20 fast food restaurants. The average number of transactions per restaurant was about 5000 per month. The average transaction size was $5.18. The way their existing processor had them set up on the normal ‘one size fits all’ rate, each transaction was costing them an average of 30 cents. That 30 cents times 5000 transactions brought the total average paid per location for transactions to about $1600.

     By simply setting them up on the correct industry type they can reduce their cost to about 22 cents per transaction, thus saving 8 cents per transaction, times 5000 transactions for a savings of $450 per month, per location. THAT IS JUST ONE LOCATION! When you consider this is the average per location and he has 20 locations that is a MONTHLY saving of $9000, or $108,000 per year!

     Granted, this is an extreme case, but in business every penny counts. Business owners must make sure they are with a processor that has all of the tools necessary to customize a plan for them and still make a profit. The interesting thing about it is, the processors that simply lump everyone together tend to make enough from the 70% of business owners they are overcharging to more than make up for some losses with others.

     There are processors that not only customize for all clients but have some unique ways to keep their clients supplied with state-of-the-art equipment. The savvy business owner will seek out these leaders in the industry to drop more to their bottom line.

     Fast food small ticket is just one of the categories of business that can take advantage of special pricing and customization. You can click on the recommended processor link to have your business analyzed and get recommendations, free of charge.

Industry Codes
Proper categorization by the processor can save you money.

     Be sure your processor has you categorized correctly. With the reputable processors all contracts are custom designed to meet the needs of the client. A partial list of business types that can receive special pricing and programs are;

• Hotel/Motel
• Car Rental
• Video Rental Stores
• Utilities
• Movie Theaters
• Fast Food
• Restaurant
• Government
• Cable Services
• Satellite TV
• Auto Repair
• Tire Stores
• Furniture
• Parking Garages
• Doctors
• Dentists
• Any Business Processing Over $100,000 per month
• And many, many more….

     The only sure way to determine if you have the correct program for your business is to have a true payment professional analyze your situation and make recommendations. Many representatives are not even aware of the special categories. This is why over 70% of all businesses are paying too much, some far too much, to process payments.

     Another factor is changing rules and regulations. Actual costs change, categories are added and special programs are implemented for different business types. Make sure you use a processor that keeps up to date on the industry rules and standards.

Return to Main Page

Hot Tip To Save Money!

     If you are a business that processes over $100, 000 each month contact a payment professional immediately to have your needs analyzed. What they recommend can save you hundreds of dollars each year.

Costs Of Processing Cards
What The Costs Really Are

     Every time you take a debit or credit card from someone for payment it costs you a transaction fee and a percentage of the total transaction amount. Your cost is based on several factors; what type of business you are running, ticket size, average monthly volume and the type of card being used.

     The processing companies tend to average and blend the rates and build in a margin of error to make sure they do not lose money. Most representatives are simply given a ‘one size fits all’ rate, and that’s what they put on the contract. For well over 70% of the businesses this means they are paying far too much for processing.

     Lets look at the different elements of what you pay to process cards. These figures apply to Bank Cards, Visa and MasterCard, not the non-bank cards such as American Express, Discover and Diners Club. Non-bank cards have their own rates and fees and processors have less flexibility in determining pricing for them.

     The first element of cost is the discount rate. This is the percentage charged on each card taken. It includes The interchange rate plus the dues and assessments. The actual cost to the processor can range from 0% to as high almost 3% depending on the business type, card taken and whether or not the cardholder is present when the sale is made.

     The second element is the cost per item. It includes a flat fee called pass through and the network fees. Pass through fees range from 0 cents to as high as $35.00 for specific industry types. Network fees range from 2 cents to 10 cents and higher depending on the network, industry type, how the card is taken, software platform, terminal type and other factors.

     As you can see, setting pricing can be a complicated process. It’s no wonder many processors will not cater to all merchant types and take the time to customize a program for the business. They just do the ‘one size fits all’ rate and do not do business with the more complicated business types. The bottom line is in most cases the business owner loses.

     All businesses need to be sure their representative fully understands how to analyze their needs and categorize them correctly to save them money. Of course the processor is in business to make a profit, but the most reputable processors take the time to custom fit a program to their clients. The first article in this issue will give you an idea of just how important this is. You can send a message to the processor we recommend from links on this website and they will contact you.