Credit card processing fees eat away at profitability and impact cash flow. Ideally, you want to receive the money you’re owed quickly and with less expense. There’s no way to eliminate these fees. It’s a cost of doing business and allowing customers to remit payment based on their preferences. However, there are ways to optimize credit card processing and reduce costs with Merchant Cost Consulting.
Merchant Cost Consulting describes a service wherein credit card processing consultants work with merchants to:
The objective of working with consultants is to reduce your fees and improve your cash flow.
The first part of the relationship is the audit. You’ll send them at least six months of statements from your current processor for review and analysis. They will find any hidden fees or high rates. In this process, they are determining your effective rate. The effective rate is a calculation where you divide the total fees paid by the total amount processed and multiply by 100. Many companies don’t know this percentage and perceive they’re paying less than they are to processors.
Here’s an example of the effective rate formula.
Total amount processed: $20,000
Total fees paid: $1,000
Effective rate: 5%
From their assessment, they will determine if there are any areas for savings. You’re working with experts that have specialized knowledge. If they do find these opportunities to save, they can:
They have an incentive to deliver savings to you because that’s how they get paid. Working with Merchant Cost Consulting can also assist you with getting funds faster.
Receiving timely payments from credit card processors is critical for your cash flow. Events can occur that make this timeframe longer. It’s another area to discuss with consultants. Some ways to speed up the transfer include:
More Robust Security and Fraud Prevention Are In Motion
Security and fraud concerns will always be a trend in credit card processing. Some new measures are improving the landscape, including:
If you want transparency around fees and funding time, Merchant Cost Consulting is a smart business move. We specialize in these services and help navigate businesses through this complicated framework.