Image via WikipediaCost Savings opportunities abound for entrepreneurs, SMEs, and non-profits to improve their bottom line! Remember, any savings in expenses goes DIRECTLY to your profit/loss line!Recently, a business-to-business furniture company asked that I review their credit card processing service. They (correctly so) thought the service was expensive. In October of last year, the former accountant had done an analysis by comparing the % rates of 5 different companies. They didn’t pursue things any further, but the owner just ‘knew’ there had to be something better.
Just comparing the % charge doesn’t give a full picture of what it will ‘cost’. When it comes to POS/credit card processing services, you need to look at what cards you are using, how you are processing (in person or over the phone), if any of your clients use ‘premium’ cards, etc. All of these incur additional costs over and above the % fee. So to do a full comparison, and not spend weeks doing it, you can download a report from your provider for your annual transactions, sorted by card type (most providers give online access to monthly statements and various reports without an additional fee).
So in this instance, we took the annual $ total for each card type (Visa, Mastercard & Debit), the total number of transactions for each type, and the total number of transactions that incurred the ‘non-qualified’ ‘premium’ fees. After having all those numbers, we built a spreadsheet to plug in the comparative fees for 5 providers.
Ultimately, we found the current provider was indeed the most expensive, by approximately 35% ($3000 a year), no, not a huge number but a huge difference in cost year after year!
We also realized the lowest % rate, didn’t end up having the lowest total annual cost! What are you overpaying by not reviewing annually?
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