Tip 1 – Shop Around
Always obtain quotes from several suppliers. Prices can vary by around 40%. Tell them that you are shopping around and that their quote has to be competitive.
Tip 2 – Tell the suppliers that you speak to, that you are shopping around and their quote has to be competitive.
Tip 3 – Make sure you understand the market.
Processing services (merchant services) are sold through a network of resellers known as ISO’s (independent Sales Organisations) as well as the high street banks. All of the ISO’s act for large merchant banks who are responsible for processing your transactions and handling your cash settlement in to your bank account. Look for ISO’s and make sure you obtain a quote from them – you will find that ISO’s will offer better rates and the back end transaction processing and settlement is still done by a merchant bank.
Tip 4 – Calculate the total all in costs.
Suppliers will usually quote “Headline” or basic pricing, ie. debit card/credit card cost and terminal/gateway costs. There can be a variety of “hidden charges” depending on your business. These can include premium credit card costs, authorisation charges, PCI complainance charges and non-chip and pin transaction costs.
Tip 5 – Switching suppliers is easy and quick.
Your current supplier may seek to persuade you otherwise with scare stories, but thousands of merchants (that’s you) have cottoned onto to the ease with which switching can now be done and value it represents. Your new provider will provide simple step by step instructions to guide you through the process and almost all new terminal/gateway setup is simple without disruption to your business.
Tip 6 – At the end of your minimum contract period, re-tender your business.
Suppliers are usually prepared to offer discounts to retain your business and “switchers” are offered better rates than existing customers if you do move.
Tip 7 – As with all the other costs in your business, monitor your processing costs over time.
Suppliers will re-price their existing customers upwards over time relying on your apathy not to switch suppliers. What starts out as a cheap deal can often be expensive after a couple of years.
Tip 8 – Don’t wait to the end of your existing contract term
Consider switching if you can find a better deal. Often you will find the revised pricing on offer more than makes up for any early termination costs.
Tip 9 – Understand what the early termination costs are
Before you sign a contract understand what the termination costs are, gateway and marchant Account Services are normally 1-3 months notice. Terminal hire will have a longer tie in (3-4 years) and it is the industry norm for early termination costs to be payment of remaining terminal hire. Some suppliers, in addition., may include re-stocking fees or penalties on top of this.
Tip 10 – If your business is growing – Retender.
Pricing works on volume and if your volume has significantly grown you may qualify for a lower priced tier. And of course, your existing supplier will never offer up a volume based rate review with out prompting.
We now offer a FREE comparison service on our website that only takes 2 minutes. Or we can arrange to come and have a chat.