Ecommerce businesses can’t operate without a merchant account, but many are paying too much for merchant services. Whether a new business or one that has been around for years, it is never too late to make sure you’re not overpaying for your merchant services and payment processing.
How merchant services make money from payment processing
When a transaction is executed through your website, merchant services providers basically underwrite the money paid for the services or products you provide until the chargeback period expires. The credit card issuer lends your customer the money to pay for the transaction.
As the merchant, you are the risk to the merchant services provider and acquiring bank because the customer has the option to chargeback. If that happens, you’ll have to make good the money paid by the customer (who now hasn’t paid).
If the card issuer serving both the customer and is the same, then it will making money from both of you.
Three ways to make sure your payment processing charges are right
1 Examine fees closely
If you want to make sure you’re not overpaying for your merchant services, then it makes sense to shop around for the best fees. Don’t get carried away with promotional low set-up charges, consider the per transaction costs levied on payment processing services, as well as monthly fees. Also be aware that some of the ‘cheaper’ merchant services providers will levy monthly minimums.
2 Cut back on chargebacks
When a chargeback happens, the payment processor will take funds from your merchant account. B y this time, the customer has usually already received the goods. That means you’ll be out the return fee, too.
Make the customer experience as good as possible, including a payment processing process that is smooth and easy to use, and you’ll reduce the number of chargebacks suffered.
3 Stay PCI DSS compliant
Finally, stay PCI DSS compliant. This is probably going to be your main area of concern: failure to comply can cost tens of thousands in penalties, and to use merchant services you’ll need to evidence that you are PCI compliant.
By using a third party payment processing provider, you’ll be getting someone else to do all the hard compliance work for you. At North Payments we not only take care of the PCI DSS compliance side of the business, but we have excellent relationships with merchant services providers and acquiring banks. You can be sure of payment processing at the right price.