Customers are using credit cards more than ever before, especially online. In 2016 every 1 in 7 dollars of discretionary spending was online. Emerging market, m-commerce (purchases made on a smartphone device) is quickly expanding as well. Bank of America found that 19% of Americans use their mobile devices to shop, 51% to book travel, and 24% to order food, often paying by credit card.
As a business owner, you know that making things convenient for your customers is essential, especially in the world of digital sales. But online payment options come at a cost. Credit card transactions are subject to several fees that can hurt your bottom line. These are some of the charges your business may face for processing credit cards:
Merchant Discount Fee: This fee is for processing credit card payments and services It is usually between 2-5% of the total purchase price after sales tax. It incorporates several other fees including:
Interchange fee: Market values and the credit card network determine the amount of this fee. It is usually updated twice a year by major credit card networks. A percentage of the cost goes to the issuing bank and a fixed portion to the credit card network.
Assessments: These are fees charged by credit card networks for transactions made with branded cards.
Markups: Banks and processors charge a markup fee to cover the cost of facilitating credit card transactions. It is usually a percentage of total card processing costs for a business.
Chargebacks: If a customer disputes a charge on their account within 60 days of the purchase, a business may be charged for a retrieval request to refund the purchase. Additional fees may occur if the request isn’t honored.
All of these credit card processing fees can eat up a significant portion of your total revenue. As the use of credit cards increases, especially in the digital marketplace, your business will need a plan to deal with these additional fees and declined payments. That’s where we come in. Our auto shop declines program is the solution that can help cut back on this missed revenue. The payment recovery program can recover up to 39% of declined transactions, recover 3-4% of lost approved sales, and lower your overall processing costs. Credit card fees add up, and your business is paying the price. Let us help improve your bottom line by making it a little easier to swallow all the credit card processing fees.