It's no secret that small and medium sized business have been hit hardest by the predatory practices of merchant service providers.
We have all heard horror stories about the "bait and switch" tactics from "great rates to free equipment", but now, merchants are fighting back.
Here are five tips to help you protect your business from being a victim:
1. START DISCUSSIONS NOW with your existing merchant service provider about how they plan to pass along the new debit card savings to your business. In reality, nothing in the new regulations say the merchant service provider must pass along their savings from the new debit card cap went into effect on October 1, 2011. Get in on the front side of this. If the answer is unacceptable, then start discussions with other providers; there are plenty out there!
2. RENEGOTIATE your rates with your provider. Although in reality, this has very little effect on the true savings, typically 3-5 percent of fees can be saved with a minimal amount of effort. Do recognize that most savings occur with reworking the operational and programmatic efforts.
3. DON'T ASSUME that just because you have negotiated rates up front during your last processor change that they will stay that way. What makes this industry seem so predatory is that the interchange companies change their fee structure twice a year and therefore your processor changes their rates to you. The fine print should disclose the terms, but who has the time to stay on top of that?
4. Hire an INDEPENDENT WATCHDOG service or consultant to rework and watch every aspect of the card processing industry on your behalf. Pay them for their services based on what they save you, in order to insure that your financial goals are aligned. The beauty of this is that you are hiring experts in the field to watch your back, requiring no work or extra expense on your part. It's just money right back in your pocket.
5. Contact your industry's TRADE ASSOCIATION to see what they have to offer, in terms of group purchasing power and agreements with merchant service providers. Many times, the cost to join the group can be recouped in buying power savings alone!
This has been a guest post by Ashley Berg, CEO of Bottom Line Plus. If you think you are being charged unfairly, contact Bottom Line Plus, LLC to provide a no-charge, no obligation merchant business assessment and if determined necessary, assist you in filing a complaint with the Consumer Protection Finance Bureau.
Bottom Line Plus, LLC is a member of MAUI (Merchants Against Unfair Interchange), and an independent agent for Interchange Brokerage Company, serving over 2500 company locations, resulting in over $7M in savings to-date in recovery of merchant interchange fees.