As a small business owner, you know the value of every dime. To grow your business you must pay close attention to every expense. Unfortunately, accepting credit cards means incurring processing expenses.
Typically, credit card processing companies charge as much as 5 percent on everything earned from credit card sales, including interchange costs, processing costs, and even statement fees. Because most people pay with plastic rather than cash, you need to accept credit cards in order to survive. According to the latest statistics, by 2017 only 23 percent of all point-of-sale (POS) purchases will be made with cash. At the same time, a 33-percent increase in credit card use is anticipated. You can reduce your expenses. Here are some tips:
Comparison Shop
Before choosing a credit card processor, do some comparison shopping, since some providers have much higher fees for the same type and level of service. Most importantly, look for hidden fees by reading every word of the “terms and conditions.” You also need to choose a reputable company like Chosen Payments. In addition to saving on processing fees, you gain access to other critical services such as online reporting, mobile applications marketing, ecommerce integration, and more.
Purchasing versus Leasing a Machine
While it might seem as if leasing a credit card terminal is cost-efficient, in reality you will spend up to 20 times more than if you purchased it outright. The other issue is that leasing comes with a long-term contract that cannot be cancelled. The average cost of leasing a machine is between $40 and $70 per month, whereas the purchase of a terminal is anywhere from $200 to $400, depending on what you need.
Avoid Manual Transactions
Although are times when manual transactions are necessary, you should avoid them whenever possible. Entering transactions manually puts you at greater risk for fraud, so as protection the credit card processing company will charge a fee for every incident.
Impose Minimum Sales
If your company handles smaller transactions, consider imposing a minimum for credit card sales. For instance, the profit margin on a $5 or less transaction is only 10 percent. After paying applicable fees, you make virtually nothing. If you impose a minimum sale of $10 to $20, fees are paid you make a profit.
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