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About 20% of new companies fail before they have the chance to get off the ground. One of the main reasons why is that business owners can’t stay on top of their cash flow.
The best way to keep money coming through the door is to accept multiple payment options. That’s where the payment processing system comes into play.
These pieces of machinery allow companies to accept debit card, credit card, and ACH payments from consumers.
Depending on the type of system you invest in, you could also take inventory and perform other store functions on it. You only need to choose the right one. Continue reading to learn more.
The first thing to consider when choosing a payment processor is the type of transactions you want to be able to accept.
If you own a restaurant and want to process takeout orders over the phone, you’re going to need a payment processing system that will allow you to enter a customer’s card information manually.
To take in-person payments, your system will have to accept both chip and magnetic strip cards.
Some people either hate taking their wallet into the store with them, or they forget it altogether. In both scenarios, they’ll ask if they can pay with their mobile phone.
By offering various payment processing methods, you’ll improve your overall cash flow and attract more customers.
Payment systems come with transaction fees, chargeback fees, monthly fees, setup costs, membership fees, and cancelation charges. While you shouldn’t pour too much money into your payment processor, you should try to keep costs as low as possible.
The best way to do this is to consider what kind of business you are. For example, If you own a large furniture store that takes a great number of high transactions, you’ll want to pick the payment system that comes with the lowest transaction fees.
Keep in mind that frequent high transactions could make you a high-risk business. This will come with naturally expensive high-risk merchant payment processing fees.
Holding times refers to how long it will take for money to appear in your business account after you make a sale. Even if the customer’s payment processes right away, it could take a few days for you to see the money. This is to account for chargebacks and refunds.
You can opt for a payment processing system that will allow for same-day deposits, but it will cost extra. Be sure to factor this into your normal monthly payments.
Many people think that payment processing services and POS (point-of-sale) systems are the same thing, but they are two very different machines. POS systems let business owners manage their inventory, create sales reports, and record payments. Many of them even allow for accounting integration.
This being said, there are some payment gateway systems that also have POS capabilities. Opting for it will come with added fees.
In some cases, you can integrate your already existing POS hardware into your payment processing system. You’ll need to make sure the two are compatible before you proceed.
There is almost no coming back from a data breach. If your payment system allows a fraudulent payment to go through, it could be the end of your business.
That’s why it’s crucial that you choose a payment system that offers quality fraud protection. Find a payment processing service that flags and rejects risky transactions.
They should also encrypt data during the time of the transaction and also encrypt any data that’s stored in your system.
Some payment gateways set a limit on the number of transactions that your business is allowed to process every month. Once you hit that limit, that’s it. You can’t process anymore.
For small businesses, this isn’t too much of a problem. For larger companies, however, it could put a plug in their entire operation.
Tying yourself into a long-term contract with payment processing services should be avoided if you can help it. You want to be able to drop out of the service if you find it doesn’t fit your business model.
Most services charge on a month-to-month basis and don’t require businesses to sign a contract. If a business owner decides to no longer use the service, they can cancel their account with no repercussions.
Some services will allow for cancelations but charge a termination fee. You’ll need to find out where a service stands before you commit.
For some businesses, live 24/7 support may be overkill. For others, it’s a necessity.
If you run on extended business hours or take payments from everywhere around the globe, you’ll be glad to have the extra support in the event your system goes down. If your system glitches up and stops allowing you to accept payments at a big weekend event, you could lose out on a lot of revenue.
If you’re going to accept card and ACH payments, you’ll need to invest in a payment processing system for your business. Doing so will allow you to give customers multiple payment options, which is better for your overall cash flow.
Before choosing a system provider, you’ll need to look at their fraud protection options, customer support, holding times, and transaction limits.
While many companies tack on expensive credit card processing fees, you can rest easy knowing we don’t. That means you’ll get to keep all of your profits! Go here to complete your merchant request form!
Cash Discount Processing is the wave of the future. According to a Federal Reserve study, people use cash for approximately one in five transactions in the United States.
Some stores and businesses offer a cash discount program. These businesses take a certain percentage off the total purchase if customers pay with cash.
Any business owner considering a cash discount program probably has questions. You might wonder how these programs work, if they’re even legal, and how much you can save.
Read on to find out everything you need to know about using a cash discount processing system!
Cash discount programs are a way to offset the cost of credit card fees. Any business or individual who accepts credit cards can offer a cash discount.
Essentially, with this kind of program, customers paying with cash can save a percentage of the total price. When customers use a credit or debit card, they cover the cost of the transaction fee.
Your processor will give you a lower rate on processing fees if customers pay with cash. Some people prefer to pay with cash, and these customers are more likely to choose your business if you offer a cash discount.
Businesses that offer a cash discount can also use it to attract new customers. Not only can you use this program to save money on your transaction fees, but you can also generate more business.
Many transactions use credit cards, especially with online sellers, but the fees can make businesses less profitable. Cash discount programs are a great way for businesses to encourage customers to pay with cash.
The simplest form of a cash discount program is something like, “If you pay with cash, you get 10% off your purchase.”
This type of program is useful for any business that accepts credit and debit cards, but some are better suited for them. Businesses with a product or service that rarely changes are good candidates for a cash discount program.
Examples of businesses that should consider cash discounts include:
Businesses with a more extensive inventory might have a harder time implementing a cash discount. Large retailers, for example, have a constantly changing inventory that makes it more difficult.
The reason certain businesses are better suited for cash discounts is because of how pricing works.
When you offer a cash discount, you include the cost of credit card processing in the advertised price. If a customer pays with cash, they pay a discounted price.
To cover the cost of card processing, businesses must alter their pricing structure. A business that moves a large volume of products will therefore have to work much harder changing their prices.
As a result, food vendors and businesses with a small selection of services are a better choice for this program.
Many business owners confuse cash discounts with surcharges. However, cash discounts and surcharges work in very different ways.
It’s important to understand the differences before you decide which one is right for your company. Cash discounts are easier and more common, and have fewer legal issues.
A surcharge is a fee added to the advertised price if a customer pays with a debit or credit card. With a cash discount, on the other hand, customers paying with a card pay the advertised price.
This makes cash discount programs more flexible merchant services overall. They can be implemented with minimal changes to your business model (and without any need for additional equipment).
Surcharges can also be difficult if they’re applied across multiple products or services. For example, products with varying amounts due at checkout can confuse and frustrate your customers.
Cash discounts also allow users more flexibility when planning out their purchases in advance. They also don’t require any change in customer behavior, such as making sure they know about all applicable fees.
With a cash discount, customers view your payment options as a chance at saving. With a surcharge, it seems more like a hidden fee.
When you offer different prices to customers based on their payment method, it can raise legal questions. Businesses may be hesitant to implement a cash discount because they aren’t sure if it’s entirely legal.
Businesses using a surcharge are more likely to run into legal issues. Although legal in most states, surcharges for credit cards have to be clearly displayed at the point of sale.
Some states have outright bans on surcharges for credit card transactions. Cash discount programs, however, are legal anywhere in the United States.
With a cash discount program, the vendor adjusts the price of each product or service to account for the cost of processing fees. When a customer pays cash, the vendor applies the discount at checkout.
Because the customer never pays more than the advertised price (except with regard to taxes), there are no legal issues.
A cash discount program is one of many tools available to help you save money and make your business more profitable. Unlike a surcharge, customers don’t pay an added fee when they pay with a credit card.
Instead, customers who use a card pay the advertised price, while cash-paying customers get a discount. Businesses can use their cash discount program for advertising while saving money on credit card processing.
First Financial offers merchant services with 24/7 customer support. If you need a way to accept credit cards, we can help, even if you’ve been turned down by traditional banks.
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