Reduce your card processing costs
The global giant Visa makes its income by supplying its customers with trustworthy and safe ways to pay for their goods and services, namely Card Processing. Yet, not many people today question how this money is created.
Just how their money is made
I use Visa as an example in this article since they are a big name and everybody knows them. In order to make their money Visa charge card processing prices when a consumer uses a credit or debit card, and considering that almost all credit and debit cards make use of Visa or MasterCard there is little surprise that Visa are such a substantial, necessary force in the financial world. Sadly these premiums fall to the retailer who usually pays percentage fee per transaction for their credit card processing.
According to the British Retail Consortium (BRC), in the UK the normal card processing payment prices the retailer around 8.5 pence per deal, and for credit cards it could be as much as 33 pence. Although steps are being designed to make these prices more acceptable, they’re sometimes considered as being a little high.
Moving the Card Processing fees
However, it isn’t all terrible news to the retailer, and although card processing rates for credit and debit cards are higher than the processing fee for cash, there is a way they can filter the minor aggravation of paying the fees. Cash processing premiums are low because cash has been an ever present well-liked payment method for such a number of years, and it is actually highly possible that as debit cards gain dominance in the retail market, they too will reduce their card processing fees in accordance with requirement.
For the time being retailers are capable to make their money back by transferring their prices to the buyer. It isn’t unheard of, and many firms do this in order to keep ticking over and making a healthy income (including Visa). According to the Payments Council, consumers’ disposable income for leisure is up by 9% since 1999, so the slight boost in prices is hardly hitting them with full force.
Not only does a retailer have to pay card processing prices, on many occasions they also have to pay for their debit card terminals and other card processing hardware, and maintain them too. This is totally essential to stay in advance of retail trends and provide the customer with the best possible options in card processing; so why must the consumer not pay a little for the privilege There is frequently a lot of talk about retailers being “crippled” by card processing rates, but this is usually only when business owners fail to pass the price ranges to the customer. Failing to take credit and debit cards is not a feasible option in the UKs existing retail market, too much business would be lost if this were the case. Those SMEs (small and medium enterprises) that are struggling with card processing service fees must take a severe seriously look into their account and transfer some charges in order to continue making the sort of earnings they want.
This tactic can be optimised even further by choosing an independent card processing company that doesn’t cost alot and is more tailored to the size and operation of the individual firm. There are card processing companies out there who cater solely for SMEs, and these companies can often provide a much more competitive fee.
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