Finding a Payment Processor with Fair Rates

Time is money. We get that. So, when you answer your phone and hear a salesman that wants you to take time out of your day and talk about processing fees and your current rates, you say, “Thanks, but no thanks,” right? We understand. You have phone calls to make, emails to send by noon, and a meeting at 2pm that could make or break your next project. We also understand that this is your chaotic day (at least) 5 days a week. However, I’m here to tell you that that phone call might be worth more than just a few minutes of your day.

GEICO has an effective way of getting attention with its slogan,“15 minutes could save you 15% or more on car insurance.” With more than 10 million auto policyholders, people are clearly buying into the fact that if they spend just a little bit of time, they can save money. 15% might sound like a small percentage (maybe not even worth your time), but think of 15% of $150/month policy adding up over 4 or 5 years. Savings over 4 years would equate to $1080, and savings over 5 years time would equate to $1350.

NOTE: This is NOT a plug for GEICO, but I’m using this example to demonstrate the effects of saving just a small percentage.

So let’s talk about processing, where savings can be ever greater! Say you’re processing $100,000 per month, and a processor calls you to say that he can save you 1%; I suggest listening. I know what you’re thinking, “1%, who cares?” But think about this:

Saving 1% of 100,000 per month will equate to saving $12,000 per year!

Is that worth a little bit of your time? I’d like to think so. Just like with car insurance, your percentages of savings are going to vary based on your volume, risk level, etc., but whether you’re saving $6,000 or $12,000 per year, you’re still saving!

Now, here’s what you don’t know: Not all processors are equal. Many build cushions into their rates in order to make a larger profit off of their merchants. Say you’re currently processing at 3%, and you talk to a new processing company that promises to take you down to 2%. Many times, these processors look at your statements, perform a business check, and offer a rate that beats what you currently pay, but it’s not as low as you deserve.

Example: Company XYZ calls Sally and says that she’s probably paying too much for her processing. She gives them a chance to offer her a lower rate. If Sally is currently paying 3%, and Company XYZ determines that she could process at 1.8%, many times it will lower Sally’s rates down to something like 2.5%. This way, Sally thinks, “Wow, I’m saving money!” and Company XYZ thinks, “Awesome, we’re making more money off of Sally that we should!”

So, how do you know that you’re getting a fair rate? 3.5% might sound great. But, if you run a perfect business and have great credit, why would you pay 3.5%? This actually does happen to more businesses than you would think. Just like you, the decision makers are way too busy making decisions about other issues to worry about saving 1%. (But you know better now, right?) You deserve lower rates. Find an honest processor, that isn’t more concerned with commissions than saving you money.

Have you thought about this? A processor that pays by the hour has no incentive to make commissions at your expense, so it’s likely that you’ll get the rates you actually deserve.

Do yourself and your company a favor; take 15 minutes out of ONE day to figure out your rates, and find a company to help you lower them. If you already know that your rates are too high, do some shopping. There are fair processors out there. What you should be looking for is a company that can spend a few minutes with you on the phone, take a look at your statements, and get the ball rolling within 48 hours.

Last but not least, all fees and pricing aside, make sure that your processor is just as safe and convenient as it is inexpensive. Proper security and convenience tools can make all the difference in what a processor is offering to you as a processing rate.

Best of luck!