When referring to the percentage merchants pay for accepting credit card transactions, Visa and Mastercard use the phrase “Interchange Rate”. American Express uses the phrase “Discount Rate” when referring to their processing fees, which can be misleading. Instead of giving merchants a discount for particular purchases, they are actually taking a larger percentage of the purchase than most credit card processors. As American Express works as a closed loop system (dispersing their own cards, authorizing and settling payments), they set their fees at non-negotiable prices for whatever they can get away with in our current economy.
Too often, companies accept losing money on merchant account fees when they would not accept those kinds of losses in other areas. But merchant account fees are presented in such a way that it can feel like an insurmountable task to cut back on expenditure. It is possible the fees are purposely obscured so businesses are unsure of how to even challenge their processing companies.
By optimizing your interchange rates, weeding out unnecessary charges, and implementing more tired-and-true techniques, Verisave can reduce your merchant account fees anywhere from 25% to 35% each month. Having years of experience sorting through companies’ merchant account statements has given us a familiarity with the process. Our savings experts focus solely on reducing your merchant account fees, saving your business more than they imagined was possible.
Interchange Rates Contribute The Most To Your Merchant Account Fees
Merchant account processing is a topic that involves so many variables, it’s difficult to fully understand. Understanding credit card processing involves a variety of topics ranging from Visa, Mastercard, AmEx, and Discover interchange rates to processing options like Chase Paymentech, TSYS, Elavon, and more. This is why so many companies pay for convenience through high merchant fees – because they simply don’t have the time to really digest all the info that comes with payment processing.
However, if you know enough about the credit card industry (like we do), you can take one look at your merchant account to know where you’re overspending and start making changes to reduce your monthly merchant fees.
Start With The Basics – Visa And Mastercard Interchange Rates
We have found that nearly every company is overpaying their credit card processors. Some companies are paying thousands of dollars each month unnecessarily due to high rates and miscellaneous fees attached to their merchant account. But, accounting departments are catching on to the chaos surrounding credit card processing fees and hiring auditing firms like Verisave to cut unnecessary spending and increase profitability.
Verisave accomplishes significant savings for large companies in a number of ways.
As we approach the end of the year, we know many companies are once again looking to reduce their merchant services expenses. Below we have provided three different merchant account expense reduction strategies that will help you get started on the right foot in 2018.
Expense Reduction Strategy #1 – Examine Merchant Service Fees
First and foremost, make sure you have someone on your team who understands how to read a merchant account statement. With so many entities taking a profit from your merchant account, it’s hard to cipher through itemized lines, percentages, and more. To understand your merchant account statement, you have to know who is taking a cut from your merchant account.
How Verisave Helps Reduce, Manage and Control Merchant Account Fees
At Verisave, we specialize in helping businesses lower their monthly merchant account fees. With years of experience and back-end knowledge of the credit card industry, we managed to secure $5.3 million in savings just last year for our clients. Too many companies are letting their merchant account fees get the best of them, paying high interchange rates, late fees, and other unnecessary charges. Human errors can be made due to the complexity of merchant account statements. Bringing Verisave on board provides businesses with a three-fold service of ongoing reduction, management, and control of company merchant account fees
If you are looking to cut company spending, have you considered reviewing your merchant account statement? While completely eliminating credit card processing fees is a non-starter, reducing them is a valid option that many companies and accounting departments are simply unaware of. Three things your company can do today to immediately lower your credit card processing fees are listed below.
1. Speak With Your Current Processor
Reducing the interchange rate even a few points can have a major impact on the company’s year-end totals. Speak to your current processor to request a “Rate Review”. Processors profit from higher rates and are unlikely to let you know when your current rate is above the industry benchmark. If they are encouraged to perform a rate review, they may end up shaving off a few basis points to maintain your business.
When it comes to doing business, most companies factor into their spending plan a number of unavoidable fees. One of which is often their merchant account fees. It’s set aside, unassessed, and assumed that this fee is a non-negotiable. But what companies should know is that these fees are in-fact not set in stone and could have a major impact on your yearly costs.
Master Merchant Account Statements To Decrease Company Spending
You cannot nix merchant account fees all-together. It’s only fair that the companies offering your customers such a seamless way to make transactions receive payment for the time and manpower required to process them. Unfortunately, they get a little greedy and have high hopes that you won’t notice.
Credit cards have opened the door to many convenient business practices today. From online payments to simplified returns, there’s no way you can avoid offering this service to your customers. But perhaps you weren’t aware of just how convoluted those credit card processing fees might be? It’s much more complicated than a simple fee-for-service.
This modern sales convenience has something lurking in the closet. You saw him when you first signed up for your merchant account. He was sitting in the corner of the room, quiet, innocent, a little hairy and seemingly unavoidable. When you signed your contracts, you promised to let him hang around. But that monster didn’t stay quiet for long. He quickly became a noticeable disruption. He got hairier, stinkier, and louder.
That monster and all of his gross flaws are your Credit Card Processing Fees.