I just stopped into a restaurant yesterday and was shocked to hear the news. But maybe I shouldn’t be that shocked because I’ve heard the story for years. Once again, another dishonest credit card processing company just burned another brand new business owner. It all started out when the little restaurant owner got a call from a fast talking salesman who was good on the phone. They hooked him with a few promises that sounded great and before he knew it they were on their way over. And in no time at all, this unsuspecting business owner was locked into a contract that he couldn’t get out of, even with the best lawyers in town. If only he had read this article first.

They’re great on the phone and sometimes even very good in person (if they have been flown into town for a few days to sign up as many contracts as possible… Then proof! They pack up and you never see them again). But as my granddad used to tell me: “believe half of what you see and none of what you hear.“ Look through the contract, check ALL of the rates, and verify their references to make sure they will do what they say they’re going to do. You can also call our office and we can check them out for you.

First of all, unless you’re doing a cash discount program there is no way to get your rates this low unless you’re doing a tremendous amount of debit card volume. The reason being, the Visa/MasterCard interchange rate schedule (which is over 60 pages long and every different type of card imaginable is on there) shows that most cards are above 2%! This means that a credit card processing company who promises such rates below that number is essentially saying they are going to lose money on the deal – and Basically pay YOU every month. And There’s absolutely no way that’s going to happen.

Credit card companies make massive amounts of money and there’s a reason for it. They are very good at what they do and they can hem a business owner in through several different means, checking & savings accounts, interest on the cards themselves, interchange transaction fees (which they are legally allowed to set the rates for) and other fees. So there’s absolutely no way they are going to take a loss month in and month out and give it to you for free, or below their cost.

So with a promise like this, it basically means that the sales person is either lying to you or not disclosing all of their fees. And in my 12 years in this business I’ve seen lots of credit card processing companies do this. It took me six months to learn how the rates work in this industry, and if you’ve ever seen a credit card processing statement you know how complicated and difficult it is to understand. I literally thought I was reading Chinese at first glance! So you need to be careful and note that there’s going to be several cards such as business, commercial, purchasing, or rewards to cards that are much closer to 3% or more.

The reality is, with the rising amount of rewards cards in the marketplace (currently the number one fastest rising card) you are going to have many of your cards reach very close to 3%.

However, there are also cards that range as low as under 1% including many regulated debit cards. This is the reason you should NOT go with a flat rate provider such as Square or PayPal. While these programs may sound good and sound simple, you are missing out on tremendous savings on these such cards. Instead you want an interchange plus pricing model which is pricing that’s usually reserved for the big guys like Walmart and McDonald’s. For example, a veterinarian here in town, one of our longtime clients, found that nearly 75% of his cards are debit cards. And with the rates we were able to give him with interchange plus pricing he saved thousands per year in fees. So steer clear of flat rate pricing models.

Cash discount is on the rise and currently gives business owners the amazing opportunity to pass along all their fees to cardholders, saving literally thousands of fees each year.

By implementing this program, we have seen clients cut their costs by over $30,000 per year in fees! That can make a major difference for businesses who need to utilize that capital for growth, marketing, more employees, more equipment, or that much needed vacation.

Think about it from the customers standpoint. If you pass along roughly 2 to 3% on a $100 transaction straight to the cardholder, that’s only about $2 or $3. Not much. But when you add that hundred dollars over and over and over again during the course of each business day, week, month and year then as a business owner you end up paying literally thousands of dollars a year. So to pass this along to the customers themselves is very feasible and easy to implement. Plus it can save Business owners mammoth money.

Case in point, we’ve got a little bakery shop here in town that we’ve processed for years. And Regina the owner is always innovating, always looking for the next best thing to improve her business with marketing campaigns, advertising or looking for better deals and ways to stay above the pack beating the competition. And she jumped on our cash discount program right away. In fact she was one of the first to say yes and jump on board. And quite literally as a result her sales went directly up, her costs went down, and truth be told her store is always busy. Each time we go to see her shop at Cupcakes & More she is pretty much always slammed with orders. As a very successful business owner and probably the most successful bakery in town, she knew that this is the future and that she didn’t have to eat these costs anymore. Now she’s using that money to bolster her business even more. And the rest of the competition are just struggling to keep up with her.

And you can do the same thing as Regina. Now business owners can save that money and put it back into their own pocket for better uses of business capitol.

Today is the time to start implementing these changes and take advantage of the ways you can bolster your business. If you’d like to learn more about how to implement these tools and programs into your business, simply reach out to one of our highly trained team members who can assist you in saving money and help make your business more successful.