Credit Card Processing Blog

What Are Merchant Cash Advances and Are They a Good Idea for Your Business?

As a business owner, you may have heard the term Merchant Cash Advances (MCA) thrown around and wondered whether you should take advantage of them.

For starters, Merchant Cash Advances allow merchants to get an advance on their future revenues. Essentially, you’re selling a portion of your future sales in order to get an advance on capital.

These kinds of cash advances work differently from traditional bank loans. In order to qualify for one, a merchant has to accept credit card payments and/or have other income streams that regularly fund the business. After applying, the credit card processing company will then determine risks based on a merchant’s credit card revenue. If it looks like a merchant will easily be able to pay back the advance in a reasonable time, they get approved for the MCA. The advance amount will then be deposited into their bank account.

Merchant cash advances are designed for merchants that may not be able to easily get a traditional business loan. However, with convenience comes a cost. The interest rates on Merchant Cash Advances are typically higher than a traditional business loan. Because of this, it’s important to understand all of the pros and cons, and how they may affect your business before you say yes to an MCA.

  1. The approval process is relatively simple.

Unlike a traditional business loan which typically requires an extensive approval process, your application and approval for a Merchant Cash Advance are based solely on your credit card revenue. Usually, the application process is one or two pages that require crucial information such as your business tax ID and social security number (among other things). Because approval is based on revenue, you will need to provide past payment history including bank statements and credit card transactions.

If your business regularly processes a high number of credit card transactions but has bad credit, an MCA can allow you to access capital quickly in a pinch.

  1. You can get approved quickly.

Perhaps you have an emergency (for example, a key piece of equipment needs to be replaced) or you have the opportunity to take advantage of an offer that will upgrade your entire business (for example, a great deal on new fixtures). Since the approval process for an MCA is done online, you can access funds much faster. Often, the money will be in your account in a day or two.

  1. There’s no interest.

With an MCA, there’s no interest and the amount you owe never changes.

How a merchant pays back the loan depends on the factor rate (the number that sets the total amount the business owner has to pay back for the MCA) and the retrieval rate (the fixed percentage taken out of credit card sales to pay back the advance).

The factor rates generally range between 1.12 and 1.5. For example, if the factor rate is 1:3 and an owner gets an advance of $50,000, this means they’ll have to pay back $65,000 — and so on. Retrieval rates vary between 5% and 15%. So, if the retrieval rate is 10% and the merchant brings in $2000 in credit card sales every day, $200 of that will have to go into paying back the MCA.

  1. It’s expensive.

If you need an influx of cash in a pinch, an MCA may be your best bet. However, that kind of convenience comes with a hefty price. If you do your research, you’ll find that as long as you make your payments on time, it may be much more affordable to get a traditional business loan.

  1. MCA’s aren’t regulated.

MCA’s aren’t loans, therefore they’re not regulated by standard lending and usury laws. This is why lenders can charge the exorbitant fees that they do. The general lack of regulation on MCAs leaves business owners open to the risk of taking an MCA deal with a predatory lender. Before you say yes to an MCA, make sure that you carefully review the terms and the reputation of the provider.

At the end of the day, you need to carefully consider what business goals an MCA will help you accomplish. Will it allow you to invest in an area of your business that will create even more revenue (for example, the purchasing updated equipment) or is it simply to cover overdue bills? When accepting an MCA you want to make sure that the funds are going to help you grow your business and not just provide a band-aid solution to pre-existing problems.

6 Things to Look For in a Credit Card Processing Company

Running a cash-only business simply isn’t realistic. If you’re going to grow your business, you need to be prepared to accept credit and debit cards. (According to a recent study by Intuit, 83% of small businesses that began accepting credit cards saw an increase in sales.) This means choosing a credit card processor.

First thing first: no matter which payment processing company you choose, there’s going to be fees attached — that’s unavoidable. It’s also not an easy task choosing the right credit card processing company. There’s a lot of information to sift through before you can make an educated decision. With that said, there are some essential features you need regardless of which provider you choose.

Here’s a couple of things that you should look for in a credit card processing company.

  1. Accepts all major credit cards.

There’s nothing worse than having to turn a customer away because you don’t accept their payment of choice. Instead, look for a credit card processing company that accepts all major credit and debit cards. Depending on what kind of business you run you may also want to look into a processing company that also can handle gift cards and electronic benefit transfers (EBT).

  1. Supports new payment technologies.

If your business favors tech-savvy customers, you’ll want a processing company with near-field communication (NFC) technology, so you can accept digital wallets such as Apple Pay, Samsung Pay or Android Pay. That way, your customers can easily make a purchase directly from their smartphone or tablet.

  1. Fraud protection.

As a merchant, you’ll want to protect yourself from fraud as much as possible. Always make sure that your credit card processing company offers solid fraud protection services.

  1. PCI compliance.

If you’re planning to accept credit cards, you’ll want to make sure that your processing company is PCI compliant. The Payment Card Industry (PCI) Data Security Standard is an information security standard for organizations that handle branded credit cards from the major card schemes. The PCI Standard is mandated by the card brands and administered by the Payment Card Industry Security Standards Council. However, PCI compliance is not federally mandated and merchant account providers are not legally required to follow security standards set forth by the credit card industry (yikes!) Check to make sure they’re compliant before you choose a processor.

  1. The ability to process both online and offline payments.

Things change. While you may be a brick and mortar merchant right now, there’s always a chance that you’ll want to take your business online in the future (or vice versa). Look for a processor that can handle both in-person and online payments so that you don’t have to go through the hassle of switching providers when your business evolves.

  1. Helpful customer support.

While it may be tempting to go with the cheapest option possible, it’s worth paying a little extra for helpful customer service. Look for a processing company that includes 24/7 customer support. When you’re running a business, time is money. Having access to helpful and efficient customer service is worth its weight in gold.

Is an iPad POS the way to go?

It used to be that you’d walk into a small business and admire their iPad POS with a mix of admiration, curiosity, and awe. There’s something about an iPad POS that automatically signals “cool and forward thinking” — and dare I even say, “trendy.” However, iPads have now become an increasingly common POS choice  — especially for small businesses — because they offer advantages that a traditional POS doesn’t.

Here are a few reasons why an iPad POS might be the right choice for your business.

They’re affordable.

Unlike a traditional POS system which can cost a merchant upwards of $20,000, an iPad is much more affordable. You should be able to get set up for around $1000. If you’re a new business, this drastically reduces your startup costs. Also, iPads tend to be really durable and typically last for about 4-5 years. If you do need to replace an iPad, it will only set you back a couple of hundred dollars and you can easily pick one up through Apple or your local electronics store.

They’re flexible.

You’re not tied to one app. When you purchase an iPad for a POS, you’re buying into the entire Apple universe. If you’re not pleased with the POS app you’ve downloaded you can easily switch apps without impacting the flow of your business or your bottom line.

They provide an enhanced customer service experience.

Paying a restaurant bill. Purchasing spa services. Minimizing lineups. These are all customer service experiences that can be enhanced with an iPad POS. There’s nothing worse than having to wait to pay after you’ve had a great experience. Whether they’re on the shop floor, at their table or interacting with your business in another way, with an iPad POS you can provide your customers with the option to pay their bill on the go.

They have powerful integrated features that you can’t find anywhere else.

From inventory tracking and direct ordering for restaurants to shipping integrations, loyalty solutions (for example, the ability to integrate with Mailchimp to send customer emails) and more, an iPad POS offers powerful integrated features that are beneficial to both the merchant and the consumer.

They’re already familiar.

If you cringe at the thought of having to train your staff on how to use a POS, you might want to consider an iPad. Thanks to the proliferation of smartphones and tablets, people are already familiar with how an iPad works, making training very easy and straightforward.

They’re aesthetically pleasing.

When it comes to iPad POS, it’s hard not to mention cool points. For many merchants, the fact that they’re aesthetically pleasing is a huge selling point. Lloyd Swords, owner of the Harper and Madison coffee shop told ShopKeep (an iPad POS system), “The clientele we are going for has a sort of hipness to it and to see the iPad being used as a cash register will be a novel attraction for the café.” If you’re a business that prides itself on being cutting edge and forward thinking, an iPad POS is definitely going to send that message.

Should you charge your customers a credit card processing fee? Here’s what you need to know

There’s an old adage: just because you can, doesn’t mean you should. As a business owner, you might be considering charging your customers a credit card processing fee. Charging the customer is an easy way of offsetting your own costs in that area. However, just because you can do this doesn’t mean that you should. There are different laws, card brand agreements and consumer laws that need to be followed depending on the nature of your business and where you’re located.

To help you make the right decision, here’s what you need to know about passing credit card fees onto your customer.

There’s a difference between Surcharge Fees and Convenience Fees.

First of all, it’s important to understand that Surcharge Fees and Convenience Fees are not one and the same. Surcharge Fees occur when you pass the processing fee onto the customer to help minimize the amount you as the merchant pays for processing credit cards. Whereas Convenience Fees are charged when you’re providing the customer with a payment option that may not have been available to them otherwise. (For example, when you go into your local bodega, make a purchase under a certain dollar amount and are charged an additional fee at the till.)

In the United States, there are certain states that don’t allow credit card surcharging.

If you’re operating in the United States, you’ll want to make sure that your State allows credit card surcharging. While some card brands allow surcharging if you follow the specific guidelines of their merchant agreement, at the end of the day it all comes down to where you’re located. California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Puerto Rico, and Texas all prohibit merchants from applying surcharges. Even if you don’t reside in one of these States, it’s important to read through your merchant agreement and know the local laws.

Each card brand has slightly different guidelines.

Research each card brand and familiarize yourself with their surcharge guidelines. Each brand has slightly different rules, so it’s important you read through each of them carefully.

Visa lists its guidelines under the 5.6.1.3 US Credit Card Surcharge Requirements – US Region and US Territories. Mastercard has its own distinct set of rules for US merchants which can be found here:  5.11.2 of the MasterCard Rules. Lastly, if you’re planning on allowing customers to pay by Amex, make sure you become familiar with their US Merchant Policy.

Consider the customer experience.

Sure, tacking on a credit card surcharge to customer purchases will help you offset credit card processing fees initially, but it might not be worth it in the long run. When you’re considering adding an additional fee to credit card payments, you need to carefully consider how it will impact the customer experience — especially if you’re a new business looking to develop a loyal customer base.

Think of it this way: people don’t like to pay extra just to use their preferred payment method. It leaves a bad taste and may impact whether a customer comes back in the future. As a merchant, credit card processing fees are a reality of doing business. To minimize the impact on the customer experience, it pays to do your research and find a processing company that offers you the best deal possible.

Decoding your bill: how to understand the fees on your monthly credit card processing statement

Trying to get a grasp on your monthly credit card processing bill can make you feel lost, with a bunch of hard to decipher numbers and what-the-heck-does-that-mean jargon laid out before you. As a business owner, you want to make sure that you’re not paying more than you have to for credit card processing and that your costs haven’t suddenly increased from one month to the next. This starts by having a firm grasp on your monthly credit card processing statement.

Trying to decode your statement? Here’s what you need to know.

Compare more than two months of statements at a time

If you’re looking to examine your costs from month to month, it’s helpful that you grab more than one statement to compare side by side. Because of the nature of credit card processing, it may take more than one statement to get a clear picture of one month’s worth of charges.

Effective Rate

The effective rate of a credit card processing statement is the total processing fees divided by total sales volume. In other words, it’s the percentage rate you’re paying for accepting payments by credit card. Effective Rate can be calculated using the following formula:

(Total monthly fees / Total monthly sales) x 100 = Effective Rate

Your total monthly fees include everything from processing charges and gateway fees to statement charges and equipment rental. It’s everything that you see on your statement. By looking at your Effective Rate (which should be visible in the summary portion of your statement) you’ll be able to see the big picture cost of how much you’re paying for credit card processing.

Interchange fees and card brand fees (wholesale costs)

Credit card brands like Visa, Mastercard and the like will take a cut of processing costs – these are called brand fees or “card association fees and assessments.” In addition, banks that have issued the credit or debit card to the customer will charge an interchange fee to cover the cost of processing each individual card and transaction (the more perks the card has, the higher the interchange fee). These are called wholesale costs and they might not be visible on your statements because sometimes they’re integrated with markups.

Markups

Everything outside of the fees mentioned above is considered a markup. This includes Processor Acquirer (fees added by the processor behind your merchant account), Merchant Service Provider (MSP) (the organization that sets up and manages your merchant account) and Additional Service Providers (fees associated with equipment or gateway providers).

Effective Markup

Markup fees vary wildly based on the the MSP, so knowing your markup costs is a good way to see if you’re paying more than you need to be. If you’re able to see your interchange rates and card brand fees on your statement, you can easily calculate your Effective Markup, which lets you see exactly how much you’re paying in controllable fees each month. You can calculate it using the following formula:

[Total Fees – (Interchange Fees + Card Brand Fees)] / Total Sales = Effective Markup

When decoding your monthly credit card processing statement, it’s important to understand the individual fees, but also look at your costs from a big picture perspective. If you don’t have access to your interchange rates and card brand fees on your statement, focus on your Effective Rate because that will tell you how much you’re paying in fees per month.

Here’s Everything You Need to Know about Mobile Payment Processing

When it comes to credit card processing, the future really is mobile. According to a recent Juniper Research study, by 2023, mobile point of sale systems (mPOS) will account for close to a quarter of all POS transactions globally. That’s an estimated 87 BILLION transactions annually.

It makes sense. From arts and crafts vendors and food services to mobile businesses that need to make payments on the go, mobile point of sale systems are the way to go. Even brick and mortar stores and traditional restaurants are adopting mPOS as a way to make their business run smoother and more efficiently.

So, you’re a small business owner setting up shop and you want to accept payments on your phone and/or your tablet. Now what? Here are a few key points you need to know about mobile processing.

  1. You need to have internet availability.

If your business is operating in a remote area where there’s no wifi or cellular reception (or even an indoor space where getting a signal is challenging), a mPOS isn’t going to be the best option for you. In order to process credit card payments, you need to have a reliable internet connection. Whether it involves upgrading your current mobile plan or purchasing internet access from the venue where you’ll be making sales, these are costs that you need to factor into your business.

  1. You’ll need the right hardware.

Whether you’re going with a traditional point of sale system or mobile, you’re going to have to invest in the correct hardware. You’ll need to check to make sure the app you want to use is only available on iOS or whether it’s also available on Android, and then figure out what device best fits your needs and budget.

Next, you’ll want to look into a card reader. While most are universal, there are some card readers that need a Lightning connection for iOS devices and iPhone 7 and newer. You can get an adapter to bridge this gap, but if you want to keep things simple, a better option might be to go with a Bluetooth-enabled reader instead.

Lastly, are you looking for a mPOS that supports a receipt printer or printer driven cash drawer? What about a barcode scanner? If you’re looking for these features you’ll have to purchase additional hardware.

  1. Processing times matter.

Once a customer makes a payment with their credit card, you’ll want that money in the bank as soon as possible. Although times vary based on the processor, most should be able to deposit money into your account within 2 business days. Some processing companies even offer next day deposits, so it’s worth doing your research.

  1. Look for extra features.

Some mPOS and credit card readers offer extra features that can be really beneficial to your business such as accounting integration (Quickbooks or Xero), invoicing, a customer database (that saves phone numbers and other info) and even inventory management options. Figure out what you think you’ll need and choose accordingly.

  1. Know what’s important to you and do your research.

As a business owner, you know what’s most important to you. Do your research to see what kind of software each card processor comes with. What features do you need most? What kind of card reader is compatible and how much does all of this cost? Only you can answer these questions. Make a list of every feature that you’d like to have (but maybe isn’t 100% necessary) and go from there.

How to Navigate Credit Card Processing as a High-Risk Merchant

“Cash only” is so three decades ago. If you’re going to be running a business in 2018, you need to provide your customers with the option to pay by credit or debit card — no ifs, ands, or buts. If you’re an online business, you can probably get away with having PayPal as your sole option, but as your sales grow you’re going to need to upgrade to provide more payment options.

With that said, not all businesses are treated equally. Businesses are treated differently based on the perceived level of risk they present for the credit card processor. While high-risk credit card processing comes with its share of challenges, it doesn’t have to mean the end of your business.

Here are a few important things to keep in mind while navigating credit card processing as a high-risk merchant.

  1. The processor determines whether you’re high-risk.

When you apply for a merchant account your processor will determine whether you fall into one of their high-risk business categories. Unfortunately, there’s no negotiating here. What qualifies as high-risk varies based on the processor. For example, some processors will deem pornography or drug-related paraphernalia as high-risk merchants, whereas others may have different criteria. If you’re not sure if your business qualifies as high-risk, reach out to the processor for more info before you apply.

  1. How your high-risk business is treated depends on the processor.

How a high-risk merchant is treated also varies based on the processor. Some processing companies simply won’t accept high-risk merchants at all, whereas others may just charge you higher than normal fees. There’s also a third branch of companies that specialize in high-risk credit card processing. Do your research and find what a processor’s high-risk criteria are before you waste time applying to a processor that will likely reject you.

  1. Understand why you might be considered a high-risk merchant in the first place.

While criteria vary slightly depending on the processor; high chargeback or fraud rates, offshore businesses, products with questionable legality (for example, pornography), questionable sales or marketing practices (i.e. if your business appears as a potential scam), bad personal credit or a high-average ticket sale (for example, if you’re routinely selling big-ticket items) are all considered factors when considering whether a merchant is high-risk.

  1. High-risk merchants typically pay more in fees and have to sign longer contracts.

When it comes to contracts, the industry average for non-high-risk merchants is usually around 3 years with some room for negotiation. However, as a high-risk merchant, you’re going to typically be stuck in longer contracts from 3-5 years with very little wiggle room due to your high-risk status. Your contract may even include an early termination fee and a liquidated damages clause if you decide to get out of the contract before the end of its term. Add in the higher processing fees you pay and being a high-risk merchant will cost you more overall.

  1. Beware of predatory high-risk credit card processing companies.

Yes, you should expect to pay higher fees as a high-risk merchant, however, be aware that there are also businesses out there that are looking to take advantage of your situation. Check out their website. Is it modern and looks like it’s been updated recently? Read what other customers have to say about them online. Is the feedback positive? Before you sign on with a high-risk credit card processing company make sure you read the contract carefully — including all the fine print — to avoid any hidden fees or clauses that could be detrimental to your business.

Is American Express Growing Faster than Mastercard?

American Express was founded all the way back in 1850. Since credit cards obviously weren’t around yet, the company’s roots were in express mail. In 1891, Amex expanded to traveler’s cheques. This helped them create a global presence. After first discussing the possibility of a charge card in 1946, the company spent over a decade to launch their Diners Club Card in 1958. By that point, there was so much demand for this type of card that the company issued over two hundred thousand prior to their official launch date.

Since then, the company has added their Green, Gold and Platinum cards, as well as a number of branded partnership cards. This had led to more than one hundred million Amex cards being in circulation, with about half of those belonging to consumers in the US. While this may sound like a clear success story, the company has hit some obstacles along the way.

One issue that plagued American Express for a long time was their practice of charging higher fees than other card companies. This made many merchants reluctant to accept Amex cards from their customers. However, they’ve been able to work around these obstacles and are on the cusp of hitting a very big milestone.

Amex is On Pace to Pass Mastercard

While the year is shaping up to be really strong for all credit card companies, American Express is seeing especially good results. Although Visa is still the dominant market player with a share of over 50%, the momentum Amex has built means they’re poised to take the #2 spot from Mastercard. If this occurs, it will be the first time any of these positions have changed in several decades.

The big move that American Express has made is thanks to posting a growth rate of 10% for the last two quarters. In terms of specific strategies that have helped the company reach this point, the reduction of merchant fees has been instrumental in its recent success. After losing an exclusive deal with Costco in 2016, the company decided to shift to this new model with the goal of driving a faster increase in card loans as well as transaction volumes over the coming years. Based on its current position, this strategy appears to have been the right one.

What This Means for Your Business

Because American Express has long been associated with higher transaction fees, plenty of merchants have made a habit of not accepting this card. But since that’s changing and more people than ever want to use Amex to pay, this is a policy that all businesses should revisit.

If you’re thinking about revising your practices for accepting Amex cards, having the right payment processing partner will make this easy to do. And even if you’re less than thrilled with your current processor, the good news is our online resources ensure that switching to a new credit card processor is as simple as possible.

How Serious is Facebook About Blockchain Payments?

The past year has been anything but easy for Facebook. Not only have they been in the middle of the fight over online privacy, but their recent earnings report showed that fewer people are using the site. While it’s easy for some pundits to point to the rise and fall of MySpace, the reality is that Facebook is in a much different position.

Not only is the platform still far larger than any network that came before it, but the company also owns Instagram and WhatsApp, which are both thriving. So even though the Facebook brand is going through an identity crisis, the company itself still has an incredible amount of resources.

Those resources aren’t sitting idly. Instead, it appears that Facebook is aggressively exploring a number of different opportunities that could unlock their future growth. One of those opportunities is the blockchain. Although we’ve discussed how this technology can be used for a variety of applications, it appears that Facebook is specifically interested in payments.

Facebook’s Recent Blockchain Moves

The first sign that Facebook has plans to roll out some form of payments involving the blockchain is one of their senior employees left Coinbase’s board to avoid any type of conflict of interest. This same employee previously worked at PayPal.

Another move that signals the company’s interest in this type of payment solution is their meeting with Stellar. Although they ultimately passed on creating any type of partnership, it’s obvious this is something they’re exploring.

Facebook Isn’t the Only Company Still Moving Ahead with the Blockchain

After the huge spike and decline of the main cryptocurrencies leading into 2018, certain trends like ICOs cooled off considerably. But as prices have reached a more stable point (at least for the time being), it has actually given a lot of companies like Facebook the room to focus on interesting projects related to the blockchain.

One company that’s taken this type of step is UPS. They recently filed a blockchain patent that utilizes this technology as part of a distributed system for sending packages worldwide. The patent focuses on storing numerous types of data within a distributed ledger network, including information about a package’s destination, its movement, and transportation plans for shipment units.

Capital One is another major player that has shown recent interest in this space. The patent they filed is actually a continuation of a previous one, and it’s focused on a proposed system that’s designed to receive, store, record, and retrieve authentication information for a user in multiple blockchain-based member platforms.

We will continue to keep you updated with any blockchain news that may be relevant to your business. And if you want to be confident that you’re always able to take advantage of the latest technology, working with a leading payment processor will ensure you’re never left behind.

4 Key Things to Expect When Applying for a Business Loan

With the exception of mortgages, debt is generally viewed as something negative for consumers. But for businesses, the issue is a little more complicated. While businesses can definitely take on bad debt, strategic debt in the form of a business loan can be very beneficial. In fact, a study conducted by researchers at several different universities found that a loan of just $11,000 can increase a small business’s three-to-five-year survival rate by more than 50%.

Given that very significant finding, it shouldn’t come as a surprise that more than 10% of all small business entrepreneurs are expected to apply for a business loan during the course of 2018. If you’re one of the entrepreneurs planning to go down this path, it’s completely normal to feel at least a little overwhelmed. Not only does the application process itself require a lot of effort, but you may still have some reservations about the burden of taking on a loan.

Because there is so much to manage during this process, we want to share several helpful insights about what to expect as you go through the different steps of applying:

There are Different Types of Business Loans

Not all business loans are created equal. There are actually several different types of loans that you should look into for your business, including a bank, SBA, and alternative lender loan. Each type comes with its own list of pros and cons, which is why it’s important to evaluate them in relation to the specific needs of your business.

Know Your Cash Flow and Expenses

Cash flow and expenses are both metrics that you’ll want to take into account as you’re looking into which type of loan makes the most sense for your business. For example, if you typically get paid in 90 to 120-day cycles, the loan terms that work for your business may be very different from a business that operates on 30 to 60-day payment terms.

Not All Banks are the Same

Just as there are different types of loans, keep in mind that if you decide to apply for a bank loan, these institutions can be very different as well. Banks often have specific types of businesses that they prefer to loan money to, so finding one or more banks that fit the profile of your business can save you a lot of frustration and potentially wasted time.

5 Factors Loan Providers Evaluate

Although every lender will have factors that matter to them the most, you can count on almost any lender looking at a handful of specific factors. Those factors include your collateral, capacity for handling debt, existing capital, macro conditions and the reputation of your business.

Only you can ultimately decide if applying for a loan this year makes sense for your business. If it does, the above information will help you throughout the process. And if you’re tackling other financial aspects of your business as well, be sure to take a look at our credit card processing 101 guide.

Solutions to 5 Common e-Commerce Challenges

Even though the e-commerce landscape is quite competitive, it still offers an amazing way to sell to customers across the United States and even the globe. If your business already has an e-commerce site online but it’s not driving the level of results you want, there are a number of ways to improve it. To help you out, here are solutions to five of the most common challenges merchants face with e-commerce:

  1. Slow Load Times

Consumers expect websites to load quickly. And if a site doesn’t load, people are going to leave. That’s why when Amazon did an internal case study about speed, they found that over the course of a year, a single second of lag time would cost them over a billion dollars in sales! What makes this situation more challenging is e-commerce platforms often have complex features that can slow them down. You can avoid this problem by running a speed test, identifying any sources of slowness and then changing or eliminating them.

  1. Poor Mobile Performance

A big part of why people are buying more online than ever before is they no longer need to be in front of a computer to make purchases. Instead, they can just pull out their phones. However, you will only benefit from this consumer behavior if your site performs great on smaller screens. If this is currently a problem area, a great way to start remedying it is by switching to a responsive web design.

  1. Lack of Engagement

Social media has transformed the Internet from a publishing platform into a two-way communication channel. People want to be able to chat and express their opinions online. So if you don’t feel as connected to your customers as you would like, the good news is there are several ways to change this. The first is to increase your social media activity on both Facebook and Instagram. You can also increase engagement by using your email list to interact with potential and current customers on a regular basis.

  1. Not Enough Traffic

Because there is so much competition online, simply having an e-commerce site up and running is not enough to guarantee that people will visit it. If a lack of traffic is the reason your site isn’t generating the type of revenue you’d like, there are both short and longer-term strategies. In the short-term, paid advertising through Facebook or AdWords can start bringing in targeted visitors right away. Just keep a close eye on your spending. And for long-term traffic, making the right SEO content and link investments can really pay off down the line.

  1. Low Conversion Rate

What happens if people are coming to your site but not buying? One way to start figuring out what’s keeping your conversion rate low is to install a live chat tool. This can help you identify any technical or other obstacles. A less than ideal payment experience is a common culprit. If you find out that people are having trouble when they want to check out, switching to a leading processor can solve this problem for you.

Learn How Voice is Impacting Payments in 2018

Most of the biggest companies in tech are making major bets on voice. And unlike other technologies such as VR, which had a big push a few years ago but seems to have stalled, many consumers are taking to voice in a big way. That’s evidenced with trends like Amazon’s Echo Dot being the company’s best selling product during the last Christmas season.

Amazon is far from being the only tech giant to put a lot of resources behind voice. Google Assistant is a product that the company has continued to push forward. Given that analysts believe around fifty percent of all searches will be done by voice in just three years, it’s easy to understand why Google is taking this trend so seriously.

Because voice is still an emerging technology, there’s not much for individual merchants to do in terms of optimizing their website or online presence. However, what is worth spending a little time on is looking at how consumers are already using this technology to make payments, as well as what other plans tech companies have for enabling payments through voice.

How Google Assistant Handles Payments

Before we look at exactly how Google is using their Assistant technology for payments, it’s worth clarifying where it can be used. As of now, Assistant comes with Android phones, as well as multiple smart home devices that have Google’s brand. It’s also possible for iPhone users to download a Google Assistant app for iOS.

If someone has any of those devices, they can say “OK Google” or “Hey Google” to engage it. Once someone engages Google Assistant, common requests range from doing an online search to playing a song. And increasingly, requests have to do with making a payment.

One reason that more people are using their voice to make payments is this technology has been present in Google Assistant for a while. Through Google Pay, someone can send money to a friend or family member. What’s compelling about this is instead of needing to open an app and give multiple details, someone can just say the amount they want to send, who it’s going to and for what. The same is true for requesting money.

Making the jump from peer-to-peer payments into e-commerce could be done in a number of ways. For example, when someone runs out of a staple item in their home, they could just tell Google Assistant to order it. Depending on the item, they could also specify the merchant or simply let Google decide, which would likely be a significant new source of ad revenue for the tech giant.

As we mentioned above, there currently aren’t any major changes merchants need to make to take advantage of what’s being done with voice. Just keep in mind that it’s important to have a nimble processing partner that’s always ready to evolve with the times. If you don’t feel that your current processor meets that description, switching to an industry leading processing company is something to strongly consider.

Are Businesses Taking GDPR Seriously?

In the months leading up to the required start date for GDPR (General Data Protection Regulation) compliance, there was a lot of talk about all the different steps that businesses had to take. Most consumers also received a flurry of emails from tech companies letting them know that they were following all the measures required for compliance.

While all of this activity made it seem like GDPR was something that businesses of all sizes were embracing, new data related to this topic paints a different picture. Based on an analysis of where things are at three months after the start of GDPR, it appears that the majority aren’t in full compliance with all of the mandates.

More Details About the Lack of GDPR Compliance

According to a global study, only 1 out of every 5 businesses is fully complying with what’s required by GDPR. Although it’s easy to assume that this number only gets skewed by businesses outside of the EU, that doesn’t appear to be the case. Even when the analysis is limited to EU companies, the compliance rate still just clocks in at 27%.

Given this very low adoption rate, it’s worth looking at the root causes. One major issue is the sheer scope of GDPR. Because it requires so much of businesses, it sets too high a barrier for many. This is reflected in a very interesting data point, which is that 90% of businesses are planning to hire at least one staff member over the next year for a role focused solely on compliance.

Expanding on the burden that all of these regulations create, the cost to actually become compliant can be huge. Around 25% of businesses have spent at least half a million dollars to make this happen.

The other issue that can make compliance especially challenging is for any business that has to deal with a supply chain. This is due to the fact that not only does data need to be managed internally, but controls have to be put in place to help protect it as it flows out of the business.

What Should Businesses Do?

All of this news may come as a surprise and appear to paint a bleak picture. Fortunately, that’s not necessarily true. There are two important things to keep in mind. The first is if you look back at the EMV mandate, it followed a similar pattern.

Even after lots of upfront discussion, actual adoption took a good amount of time. And the second thing to keep in mind is this is actually reassuring for smaller businesses that simply aren’t able to be in full compliance at this time. Any business taking steps towards GDPR without fully reaching what’s required is far from being alone.

One element that can help with tasks related to GDPR is having a strong processing partner. So if you’ve been considering a switch, be sure to look at our list of recommended credit card processing companies.

Will New Tariffs Affect Smaller Businesses?

With the modern political climate, there is a lot of media noise that doesn’t necessarily make sense for business owners to pay attention to. However, there are certain decisions by the administration that can have a direct impact. A recent example of this is multiple announcements surrounding tariffs.

To help cut through all the speculation and focus on what direct impact these tariffs may have on SMBs, we want to share a quick primer on this topic, followed by an analysis of its impact:

Understanding the New Tariffs

A tariff is a tax on a specific class or exports or imports. There are multiple types of tariffs, including a fixed dollar amount on a specific item and a proportional tariff based on value.

The tariffs making lots of news were first announced at the end of May. The initial announcement was focused on aluminum and steel exports, specifically coming from Mexico, the EU, and Canada. Then in the middle of July, a new set of tariffs were announced that target a wide range of Chinese goods.

The list of Chinese tariffs was so large that the country responded by placing tariffs on over $30 billion worth of American goods, including electric vehicles and soybeans. Based on these rapid developments, it’s possible that additional tariffs may be announced over the coming months.

The Potential Impact

Now that we’ve covered what the tariffs are all about, it’s time to determine if they could impact your business. Even though these tariffs aren’t aimed at small businesses, most experts agree that a ripple effect is likely to affect SMBs.

For example, let’s say that your business regularly buys supplies made from aluminum or steel. As the price of those metals goes up, the cost of your supplies may rise as well. Depending on the quantities you’re purchasing, it’s possible for these increases to cut into your profit margin.

Because there’s not much you can do to control these increases, the best course of action you can follow is to keep a close eye on your margins. In the event they start to get squeezed, you may need to make a change like raising prices or finding other options for reducing costs.

At the end of the day, there are certain elements that can impact your business but aren’t within your control. Although that can be frustrating, the silver lining is that there are plenty of elements that you can control. Credit card processing is a great example.

If you have any reason to believe that you may be paying too much for processing credit card transactions, there’s a simple way to find out. Simply go to our list of the industry leading credit card processing companies and see how your current provider compares. In the event you are paying too much, you can easily make the switch to one of those companies.

5 Tips for Successful eCommerce Content Marketing

If you’re looking for a way to increase how much traffic your e-commerce website receives, content marketing is an excellent option. While this approach does require an upfront investment of resources, once the ball gets rolling, you will see ongoing results.

Because the Internet changes so rapidly, not every marketing technique remains useful. So to ensure that you’re on the right path throughout the rest of 2018 and into 2019, we’ve put together the five best tips for finding success with e-commerce content marketing:

  1. Create a Hub

Whether it’s a blog or other location on your website, it’s important to have a central hub for all your content. One reason this type of hub is essential is it will allow you to optimize the types of elements we’re going to discuss in subsequent tips. Another benefit is having all of your content together will maximize the SEO benefits that it reaps from Google.

  1. Utilize Email

Publishing great content is the key to getting people to your website. But because there’s so much happening online, attracting attention isn’t enough to ensure conversions. In order to really move the needle, you need to develop a relationship with these visitors. One of the best ways to do that is through email.

Start by adding opt-in forms throughout the content you publish. The more custom and relevant you can make those forms, the better. Then you can use email to continue providing value. Although you don’t want to send constant offers, you can mix that in with what you send out.

  1. Get Customers Involved

Creating content isn’t something you have to do alone. In fact, it will always be better when you get real customers involved. Whether you ask their opinion through a poll or share their images, this type of collaboration is a proven way to elevate content to the next level.

  1. Use Data

Tools like Google Analytics provide tons of insights into what people are liking, so be sure to use this information to your advantage. You can get inspired for future content ideas and even find specific pieces you’ve already published that may benefit from some revisions.

  1. Focus on Quality

A few years ago, pumping out tons of blog posts was a reliable way to get both search engine and social media traffic. However, times have changed, and these platforms no longer respond to that approach. What will get traction is content with true engagement. So instead of worrying about publishing something new on a set schedule, focus on making each piece you create the absolute best it can be.

By putting these tips into action, it won’t take long to start seeing significant increases in the amount of traffic your website receives. If you want to be sure that new visitors are always able to buy even when your site gets very busy, having a great processing company on your side will help a lot.