Did you know that there are are fewer people using cash to purchase goods? Recent figures suggest two thirds of face to face payments are made using credit and debit cards whilst only a third are made using cash, a gap that has been steadily increasing.
To make a payment online a credit or debit card has to be used and as more of us are buying goods and services over the internet, the use of cards continues to rise.
When selling goods online two processes are involved. Firstly the card payment is made through a PSP or Payment Gateway, a secure portal linked to a website where card details are entered, checked and the payment is either approved or declined. Once payments are approved they are sent through an MID or Merchant Account and then into the business bank account.
Both processes incur a fee for the website owner (merchant) which is deducted from the money received in the bank account. It is in the merchant’s (your) interest to benefit from the minimum percentage fee for credit cards and a flat fee for debit cards.
Choosing the right payment gateway is important as this is where value is added. If a payment gateway is not stable and goes offline for any reason then payments cannot be accepted. There are many stories of unstable gateways and these should be avoided; you can’t sell if the customer can’t pay. The value added by the gateway comes down to stability, security and accurate processing of data. It is also important to use a gateway that is easy to use and is compliant (PCI DSS).
The merchant account can be obtained from several different acquirers (banks) and essentially adds no value. Without the merchant account you cannot accept online payments so it is essential, but the provider is irrelevant and so it is in your interest to obtain the best possible rates.
For start-up businesses the rates quoted are often in excess of 2.5% for credit cards and 25p per transaction for debit cards and so it is important that you shop around for the best rate as this will minimise your transaction charges. Credit card rates can be as low as 1.35% for credit cards and 12p for debit cards if you know who to speak to, even for start-up businesses.
The greater the transaction value forecast the better the rate and if you choose to have additional card security in place (which we always recommended for our clients) such as 3D Secure and Verified by Visa then the rates will be on average 0.5% lower for credit cards due to the reduced risk of fraud.
If you are paying too much for your card processing either online or through a physical PDQ terminal then contact Ascensor today. Because of the volume of clients we work with and our relationship with the end processors (rather than the high street banks) we can almost always save our clients’ money on their processing fees.
With more customers choosing to use cards over cash why not offer a payment solution that doesn’t cost you a fortune in fees.