Credit Card Processing Blog

Today more people than ever before are managing their money over the Internet. Online banking, on line bill pay, on line shopping from just about anywhere imaginable, etc. is the wave of today and the future. If your non-profit organization does not yet use online credit card processing for donations, it is time you start. The ease of online processing for both the organization and the donor can result in higher donation levels. Here are some of the benefits you should consider.

The Convenience…

When it comes right down to it, online processing is just more convenient for both your organization and the person who wished to contribute. Just as it is easier for you to shop at home from your computer, people who can donate without having to send money through the mail are more likely to do so. With a few clicks on their computer contributors can send your non-profit a donation. For the non–profit receiving money has never been easier. You no longer have to make deposits and worry about checks bouncing. Once the donor has sent the money to you; it is in your account.

The Flexibility

Most people today write out very few checks, if any, and with the convenience of credit and debit cards, cash is not exchanged nearly as much as it was in the past. So, for non profits to fund raise successfully, online credit card processing is the answer. You can offer your contributors the flexibility to easily donate right from their own computer.

Easy Tracking

Non–profits who switch to online processing will find that the time and energy saved tracking donations has been simplified. You will be able to easily run reports to see who has donated and how much. You will also be able to more easily track fundraising goals.

Cost Savings

When non-profits start using online credit card processing as a means to collect donations, they find that they are saving money. Think of all the money you spend on mailings, including paper cost and the cost of stamps. When you start soliciting your donors online through email and link them to your donation page, the cost savings can be significant. Many non-profits use the trick of having donors sign up for recurring donation payments. This is a great way to increase fundraising and eliminate costs.

It Just Makes Sense

Setting up credit card processing for your nonprofit organization just makes sense. To get started you will need to update your website with a donation page and set up with a company to process your credit card donations. Then you can start soliciting your donors with this new easy way for them to contribute to your cause.
Consider What Your Credit Card Processing Needs Are

Determining what your needs are for credit card processing is the first thing your non profit will need to do. There are various processing options available and choosing the right one for you is dependent on your needs. Do you plan to take recurring donations from people or do you just occasionally process a credit card for a donation? When you have determined your needs you can then look at the different options you have available.

Third Party Processors

Third party processors are often a good fit for non profits, especially if you only rarely need to process a card payment. Third party processors will process the payment for your non-profit without you having to have a merchant account. PayPal is the most well known third party processor and they have a special account you can create if you are a nonprofit.

There are of course advantages and disadvantages when it comes to using a third party processor for you charitable donation payments. The advantage is that you will most likely save money over higher processing fees that are charged when you have your own merchant account. On the flips side however, there are some negatives.

First, when you use a third party processor, the name of the third party processor shows up on the person’s statement that made the donation and not yours. This can cause donors to think that the charge was in error and they may dispute it. If you are going to use a third party processor you need to make sure your donor is aware and knows how the charge will be listed on their statement.

Finally, another disadvantage to using a third party processor is that it can take longer to get your funds deposited into your account.

Merchant Accounts

Your other option when it comes to processing credit card payments is to open a merchant account with a credit card processing company. This option is very often the easiest and best way for accepting credit card payments especially when you have a high volume of credit card donations. Before choosing a processing company however, your non profit will need to become educated on credit card processing and learn how to find the best credit card processing company for your needs. When choosing a credit card processing company you need to make sure that the fees are in line with the industry standards, that all your service needs will be met and that customer service is top notch.

Advantages of having your own merchant account for credit card processing include your non-profit name showing up as the billing party for the credit card transaction. Additionally, your funds are available to you almost immediately when you have you own merchant account. Finally, your own merchant account will offer you greater flexibility.

The latest trend in credit card processing is the use of mobile devices which can be used to capture and process credit card data.  In our increasingly mobile society, the need to conduct business on the fly has created a new niche in the payment processing industry.  As the industry continues to evolve, the need for new services also increases.  Merchants who currently utilize mobile processing services as well as those considering the switch should research all of their options to ensure processing fees are kept to a minimum.

Mobile processing options:

Merchants processing credit cards in the field can do so in one of two ways.  The first option allows individuals or small business owners to utilize a physical credit card swiper which is integrated with their mobile device.  This option requires no third party involvement to set up and basically involves paying a per transaction fee to the independent company providing the swiper or software in use.  This option requires no merchant account or contract, which makes it very attractive to those who will process credit cards in the field only on occasion.  If, on the other hand, a merchant anticipates using the mobile credit card processing in day-to-day business transactions, they may find the per transaction fees too expensive.  For these merchants, it will likely be more cost effective to consider the second option.

Option two for mobile credit card processing involves getting a mobile merchant account.  When you create a merchant account for mobile credit card processing you increase support while at the same time reducing processing fees.  In this industry the competition is tough, therefore you must take the time to research top contenders to find the best company to meet your needs.  In most cases, if you have done your research well, opting for a mobile merchant account will save you money in the long run when compared with pay per transaction companies.

How the Internet can help

Before the Internet became a common household amenity, comparing different businesses and services involved a lot of legwork.  That is no longer the case with most information needed to make an informed decision available with the click of a mouse.  To simplify the process even more, there are websites that actually track and compare different companies for you.  Consider websites which rate providers based on cost, reliability and customer service.  Of course, it is always best to verify any information you find online by contacting the company directly.  You will want to ask pointed questions as to what fees are associated with the account and what type of support and service you can expect if you sign on.  Take notes and always remember to read all of the terms and conditions before you agree to a contract.  By taking the time to research and compare all of your options you increase the likelihood of teaming up with the best credit card processor to meet your mobile processing needs.

With millions of consumers worldwide using credit cards to pay for products and services, the issue of secure transactions is a big concern.  If the wrong person obtains your credit card information you may become the victim of fraud or identity theft which start a lengthy process full of losses and stress which only a nepenthe could relieve.  For this reason, all things associated with credit card processing must be secure. Protecting your personal data begins at home and with responsible credit card management, however once you hand over your card for processing, other security measures should kick in.

The average consumer doesn’t spend much time thinking about what happens once a credit card is presented for payment.  What we do know is that somehow money from our account is transferred to the merchant’s account.  Credit card processing is actually fairly simple, however it does require the participation of several parties to ensure credits and debits balance out.  With this in mind, one might wonder just how safe is payment processing?

Credit card fraud and identity theft?

With credit card fraud and identity theft an ongoing concern for merchants, card issuers and consumers – secure processing is a top priority.  (more…)

When you think about credit card processing companies, one of the first things that come to mind is the fees they charge and how to reduce them.  Businesses of all sizes need a processor to accept credit cards, process debit cards, and set up recurring billing subscriptions but the fees for these services can really add up.

MatchRate Plus(TM) is a credit card processing company which also allows it’s customers to refer another client – and in exchange for the referral, you earn commission based on the number of transactions that referral processes through MatchRate Plus(TM).  The idea is everyone knows at least one business owner who needs to accept cards, and therefore everyone can receive their own payment processing services for free (through the income received in referral commissions;) or even grow their referrals to become another source of income for their business. (more…)

It has long been a challenge of small business owners to find ways to reduce credit card processing fees.  Retail giants and other large corporations can reasonably absorb these fees due to the higher number of transactions they process.  Unfortunately small business owners may not see the same number of sales, making each “swipe” of a credit or debit card a costly exchange.  In fact, processing fees are often the main reason behind a small business deciding not to accept plastic as a method of payment.  As a result of recent changes in the credit card processing industry, small business owners may be able to save money on fees making it more cost effective to accept credit and debit cards for purchases.

Credit Card Processing Fees

Each time a consumer uses a credit or debit card to pay for a purchase, the merchant is charged an “interchange fee” also known as a “swipe fee”.  Right now many small business owners claim debit card transactions account for up to 80% of the monthly interchange fees their business is incurring.  The total amount of fees will vary based on the number of transactions, however a small business such as a gas station/convenience store may be paying several hundred dollars per month in credit card processing fees alone.

Proposed Cap On Fees

The Federal Reserve has proposed putting a cap on the amount of interchange fees charged to merchants.  As reported in CNNMoney.com, there are presently two different versions up for consideration.  The first would allow for a sliding fee scale based on purchase price with a maximum of 12 cents per transaction.  The other version proposes a flat rate on all transactions of 7 cents.

Impact on Credit Card Companies

These fees represent significant profits for credit card companies.  The proposed cap on fees would greatly reduce the amount of money credit card companies would receive as a result of credit card transactions.

Impact on Merchants and Consumers

Just as these fees represent profits for the credit card giants, the opposite is true for merchants, especially small business owners.  A cap on fees could save these owners hundreds of dollars per month.  In an economy where every penny saved helps keep a business afloat, this move could have significant impacts on both merchants as well as consumers.  In most cases credit card processing fees are passed on to the consumer by way of higher prices.

Another reason why the average consumer should pay attention to what is happening in the credit card processing industry is the impact reduced fees may have on the economy as a whole.  When small businesses have the time and money to focus on the growth of their business, the end result may be more job opportunities as well as reduced prices.  Both have a positive impact on the economy.  When credit card processing fees are more affordable for merchants the positive benefits will have a trickle down impact for consumers and job seekers.

While credit card processing is a necessary cost of doing business, there are some ways to spend less on the service:

Understand Your Needs for Credit Card Processing

Not every business owner needs a credit card reader attached to a cash register.  For smaller businesses, using a phone service processing system is more than adequate; while others can simply use internet credit card processing services.  Before researching companies and merchant accounts, understand what your own needs are to avoid having a salesperson sell you something you don’t actually need to operate your business.

Find a Credit Card Processor Without a Cancellation Fee

It seems everything from cell phone contracts to credit card processors have a cancellation fee these days!  Read the fine print in your contract before signing to see if the processing service you intend to use charges a cancellation fee if you decide to stop using them at some point.  You might find cancellation fees in the range of a few hundred dollars to a few thousand dollars!  Why should you pay to cancel a service you are unhappy with or which doesn’t provide the solution you need for your business?  Before signing the contract, ask if the cancellation clause can be removed and have the contract amended to show the change.  If not, keep looking for a different credit card processing company.

Skip Tiered Pricing Structures

Look for credit card processors which use an interchange fee plus structure of pricing.  The majority of credit card processing fees go directly to Visa, Mastercard, Discover or American Express.  These are the interchange fees and you can’t change them.  Processors can then add an additional fee on top of the interchange to cover their service charges.  Look for companies offering the interchange fee + processor fee structure of pricing to ensure there are no hidden fees.

Compare Several Credit Card Processing Companies

Before selecting a company to help you accept credit cards from your customers, compare several side-by-side.  If possible, compare at least four or five different credit card processing companies to see which one offers the best pricing or the complete list of features you need.  Forget your microphobia and dig into the tiny details! Once you’ve narrowed your list of companies down to three or so, contact each one and let them know you are comparing their company to a few others, and see which company gives you the best rates. They often will provide additional features or lower fees if they’re aware you’re comparison shopping.

Consulting Services

Founded by Robert Livingstone in January of 2009, Ideal Cost is a self-funded consulting service which provides insight as to how you can lower credit card processing costs.  As a merchant, you undoubtedly understand that accepting credit cards is almost mandatory in our society.  Credit card purchases account for 80% of face-to-face sales and almost 100% of online and telephone transactions.  Knowing this, you probably already have a credit card processor to facilitate these transactions or you are in the market for one.  Sadly, the cost of accepting credit cards can often diminish the benefits.

This is where Ideal Cost enters the picture.  Instead of shopping around for the best provider or paying costly fees to make a switch that may or may not save you money, you can hire Ideal Cost to do the hard work for you.  As stated in their website, “Ideal Cost’s mission is simple. We are hired by the merchant, represent the merchant, and move forward with only the merchant’s best interest in mind. Ideal Cost performs merchant account audits, consulting, and more. Our goal is to separate ourselves from the stigma of the credit card processing industry.”

This type of service should be a welcome relief for business owners who until this point were pretty much on their own when it came to deciphering complicated credit card processing contracts.  With little regulation from the government, the credit card industry has had free rein in how they conduct business, sometimes making it difficult for merchants to get a foothold in the industry.

Ideal Cost offers business owners an opportunity to turn over the time consuming task of comparing and managing their credit card processing services to an impartial party interested only in providing useful information that can assist the merchant in better managing their costs.

With Ideal Cost you do not pay to switch processors but instead allow Ideal Cost to renegotiate with your current processor to realize additional savings.  They will help you get lower processing fees and provide monthly savings reports making it easy to see where and how much you are saving.  Additional services provided by Ideal Cost include merchant processing consulting for business owners who are just beginning to accept credit cards and ACH processing for reoccurring payments.

As a start-up it remains to be seen what type of impact Ideal Cost and other companies that may follow suit will have within the industry.  The types of services offered however, definitely give merchants more options when trying to save money on credit card processing services.