Simplifying Your Merchant Processing

Part of being an entrepreneur or business owner is that you must become knowledgeable about topics that may not be that closely connected to what your business does. For example, if you opened a restaurant, it’s probably because you have experience in the industry and enjoy providing quality food to your guests. Or, you’re an independent plumber or electrician, you’re an expert at that, and you enjoy it.

However, it doesn’t take long before you realize that, in addition to your specific line of work, you’re now required to become an expert in a bunch of other things, too. Like computers. Very few businesses can stay up and running if the computers go down. Or advertising and marketing? There are so many ways to get the word out about your business, but how do you know which ones work best?

The same is true with merchant services – the processing of credit and debit cards. And as with all these other services you need, the best way to maintain your sanity is to simplify the process as much as possible, while making sure you understand what you’re paying for.

That said, here are a few recommendations that will help you simplify and better understand how your merchant service system works for you.

You’re probably busy, without a lot of free time on your hands, so it may be tempting to forget about your rep… unless there’s a problem, that is. However, if you can find the time to reach out every month or so for a five-minute conversation, it gives both of you a chance to talk about what’s going on in your business and, possibly, head off any minor issues before they become major issues. Plus, there may be new products or services you may not know about. If your rep has a regular pulse on your business, he or she will be better able to keep you informed of these opportunities.

The first thing you must do is open the statement when it arrives in the mail (or email). You’ll notice that there’s usually a LOT of data in there and if you’re the kind of person who really enjoys crunching numbers, then you’ll find hours of fun in that statement! For everyone else, though, there are two really important figures: total sales and total fees. If you can’t figure out where those numbers are, call your rep and ask. Once you have them, grab your calculator and divide the total fees by the total sales, then multiply by 100 to get the percentage of fees paid. Like this:

(Total fees) ÷ (Total Sales) x 100 = % of fees paid

So if your total sales on a statement is $20,000 and the fees are $400, it would look like this:

400 ÷ 20,000 x 100 = 2%

Do this every time you receive your statement and keep an eye open for unusual fluctuations. For example, if your fees have been coming out to between 2% and 2.3% for a long time, then suddenly jump to 3%, you should contact your rep and find out why.

In fact, it’s best to write that number on a slip of paper and tape it to your machine. Or, save it to your contacts on your cell phone. This is especially important if a high volume of your sales happens in the evenings or on weekends, like at a restaurant. Ask your rep what you’re supposed to do if a machine goes down on a Saturday night. Know who to call at your Internet service provider, too, because sometimes that’s where the problem is. In any event, have an emergency plan in place.

For most merchant processing providers, the processing fees and the cost of equipment are similar, not counting overhead for office space, marketing costs, and a few other things. So, if the offer doesn’t make sense, it’s wise to be a little skeptical.
Accepting credit and debit cards shouldn’t be a source of stress for you, even though it can be a little confusing at times. If you can simplify it and understand it, you’ll be able to spend more time focusing on what you really want to do: build and grow your business!

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