Making the Most out of Merchant Processing
American Ambulance Association members want to get the most out of their business relationships to drive the highest profit at the lowest cost. As is the case with any healthy business, it’s important to put in the time and effort required to research the best ways to be successful. Our recent webinar highlighted a few such factors and things to know about payment processing, as highlighted below:
Pricing
There are two different pricing structures that most payment processors use – tiered and interchange plus; and, the best-fit pricing structure is one that is designed to help your business thrive.
Tiered Pricing Structure
Tiered pricing is a rate structure in which several hundred different processing rates are packaged into tiers that represent three different possible rates. Most providers package the rates into three groups with varying markups. Unfortunately, there is no regulation behind how merchant account providers must package their tiers, which prevents merchants from knowing exactly how much a given provider is making on each transaction. Despite the prevalence of tiered pricing in the credit card processing industry, a more competitive and transparent pricing model is available in the form of Interchange-plus pricing.
Interchange-Plus Pricing
Interchange-Plus pricing is the most transparent pricing model and it’s what Payline offers to all AAA members. This model for pricing puts the power in your hands by giving you a straightforward and clear explanation of charges. Interchange describes the rates that come directly from the card networks. No merchant or processing company has any control over these rates. Every merchant pays interchange, which varies based on the type of card your customer is using. The plus is what Payline is charging you for our service. It is our profit and is shown in terms of a small percentage markup and a minimal transaction cost.
Fraud Mitigation & Chargebacks
Chargebacks cost card-not-present (CNP) merchants millions of dollars each year. CNP merchants need to take extra measures to prevent chargebacks and aggressively work to recover funds lost to chargebacks. Chargebacks occur when a cardholder disputes a merchant charge and a debit is made to the retailer’s account. The issuing bank charges merchants a fee for every chargeback received. Merchants with a high ratio of chargebacks may also receive additional fines or run the risk of losing their payment processing privileges altogether. While the chargebacks mechanism was created to protect consumers against fraudulent behavior, some consumers have found that it is easy to dispute legitimate charges – this form of friendly fraud creates a significant financial burden for merchants.
Statement Review
One easy way to know if you are getting the most out of your merchant processing is to complete a statement review with a trusted processing representative. “Most of the issues I look for in statement reviews with AAA members is size of ticket and what kind of pricing structure they are currently billed,” said Paddy Houlihan, Payline Data representative. “It’s important for members of the American Ambulance Association to know that if they still have a terminal and process that way that the cost to key a card can go up to as high as 0.30% versus swiping a card in person. If the business is doing large transactions it is usually in their best interest to go the payment gateway route and provide a “pay now” button on their website.”
Some partnerships make understanding new technologies difficult for you; others, like Payline Data, provide you with everything you need to know upfront. To learn more about credit card processing solutions that can help your business grow, contact Paddy Houlihan at Payline.
Contact us today via email or by phone (800) 284-7401 and we would be glad to run a statement analysis to show you how you can save money and cut costs on processing fees for the betterment and growth of your business.
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