Getting the Most from Your Merchant Services

Running a small business – whether it’s a restaurant, flower shop, or hair salon – requires wearing a lot of hats. One of the most important? Ensuring your payment system works seamlessly. But are you getting the most from your merchant services? The right system can save you time, money, and a lot of headaches – helping you focus more on your customers and less on transactions. 

In this article, we’ll break down how to get the most out of your merchant services and how to keep your business running smoothly.
 

Selecting the Right Point of Sale System

For small businesses, the right Point of Sale (POS) system is essential to keep operations running smoothly. Whether you’re ringing up customers at the counter or managing mobile payments, your POS should make transactions fast and simple. Look for features that fit your needs, like easy inventory management, customer insights, and integration with your bookkeeping software. 

When it comes to purchasing, there are plenty of options to consider. You’ll want to make sure that your system accepts the payment methods your customers want to use, such as credit and debit cards, contactless payment, and mobile wallet. It’s also crucial the system can handle the number of transactions you process monthly. Your POS system should have the latest technology, be easy to use, and have a user-friendly interface for all payment types.

It’s important to understand the features and functionalities of the system such as inventory management and tracking, streamlining sales reporting, invoicing, and data analytics for business growth and optimization. Payment security is also critical. That’s why you should ensure that the POS is PCI compliant, especially for small businesses, to provide enhanced security and fraud prevention measures to help keep your customers safe.

Depending on the type of industry your business operates in, you may have a need for specialized payment services, i.e., ecommerce, health care, military, automotive, or subscriptions.

As with any business, you should offer convenience for your customers when they make purchases of your goods and services. Most current POS systems offer contactless payment solutions, including an app, to make purchases easy and seamless. 

Budget is another important consideration. If you are a smaller retailer, all you may need is a touchscreen terminal and tablets for easy operation. For larger businesses, a touchscreen terminal, receipt printer, or barcode scanner may be extra tools you need for streamlined transactions. For any of these devices, you’ll want to ask about training and onboarding support for team members, regular system updates and software upgrades, and customer support from your provider to ensure they are available when you need them.

You may be an existing business with payment acceptance methods already in place. As you consider POS options you’ll need to know if they will integrate with existing tools or if you need to replace older systems.

As you begin your journey to selecting the right Point of Sale system for your business, the following tips can help.  
 

• Keep it Simple: Only select two or three providers that best meet your business needs.
• Request a quote: Obtain detailed information that outlines all fees and potential charges.
• Ask questions: Clarify any doubts or questions you have about potential services.
• Request a demo: You may be able to test the functionality and compatibility to your workflow.

 

Understanding Processing Fees

Merchant processing fees are charges that businesses must pay when they accept electronic payment methods such as credit or debit cards. In today’s marketplace, most consumers use these payment methods to make their purchases. Businesses accept card payments, however, with average credit card processing fees ranging between 1.5% - 3.5% and a combination of several different fees, it can get costly.

Interchange Fee

This fee is paid directly to the card issuer for use of their card payment technology. The fee can vary depending on the type of card used, amount of the transaction, and the type of business.

Processing Fee 

This fee is what the business pays to the merchant services processor for electronically processing the transaction. These fees can include minimum monthly service fees, individual transaction fees, equipment lease fees and statement fees. 

Assessment Fee

This fee is paid directly to the credit card network (i.e., Visa, Mastercard, American Express, etc.) which allows the business to use certain credit and debit cards. The fee is based on monthly sales volume and is usually a fixed percentage of the transaction amount.

Chargeback Fee

When a transaction is disputed by the customer, it may result in the business returning the funds, which is commonly known as a chargeback. When a chargeback occurs, businesses are often charged a fee for the administrative costs associated with handling the disputed transaction.

As a business owner, your time is valuable, and constantly monitoring processing fees can be overwhelming. Partnering with a merchant services provider can simplify this process, helping you reduce costs and ensure the right transaction data is collected and transmitted through Commercial Card Optimization.

Reducing Chargebacks

Chargebacks can be a costly part of accepting credit card payments for your business. A chargeback occurs when a transaction is disputed by a cardholder or card issuer for reasons such as returned goods, cancelled services, quality disputes, merchant processing errors, and unauthorized purchases.

The good news is that the risk of a chargeback can be managed by making sure the customer is satisfied with their service and purchase, and that the process for accepting a payment is followed correctly including purchases made online, via a telephone or mail. The tips below can help your business identify potential chargeback triggers and improve the customer experience.
 

• Process Chip and Signature Cards on EMV terminals. Make sure that Chip and Signature cards, Mastercard and Visa (EMV) are processed on EMV terminals so that the customer properly processes and verifies the transaction.
• Compare signatures. Look at the customer signature (if signed for the transaction) with the signature on the back of the card (if available).
• Verify the signature. Make sure that the signature and the name on the card matches the signature on the sales receipt or on the manual imprint of the card signature if you are unable to swipe a card through an EMV point-of-sale terminal. The manual sales slip must show the transaction date, authorization code, purchase amount, business name and location, and description of goods or services. If the card imprint for the transaction is not legible, you should collect the cardholder’s signature or PIN.
• Get to know your customers. You can record the customer’s telephone number, then call back to verify the order.
• Limit the number of transactions per hour, day or week from a specific customer which may help to reduce the risk of potential fraud.
• Keep a transaction record for problematic customers. This will help you to identify high-risk transactions and block specific credit card numbers of future purchases.
• Establish clear refund and return policies. Quickly process refunds to your customers. Be sure to have your refund/cancellation policy clearly printed on the transaction receipt so your customers are aware of the cancellation or refund policy in writing. Refunds must be made using the same credit card as the original sale. Never refund a card purchase by cash or check.
• Verify the embossed card number. Make sure that the embossed card number and the displayed account number match after swiping or manually entering the card. If it’s a phone order, ask the customer to read back the full card number to ensure accuracy.
• Process the charge amount after the goods and services are delivered to the customer. 
• Make sure your customer service phone number is printed on the receipt. This makes it easier for customers to resolve disputes by phone rather than through the chargeback process.
• Ask for the CVV2/CVC2 security number on the back of the card as an additional security check. Proactively monitor transactions and suspicious activities.
• Ask your e-commerce provider for a 3D Secure transaction authentication system if you accept online payments. This system will protect your business by detecting fraud and provide prevention tools. 
• Use Dynamic Currency Conversion (DCC) for purchase transactions. This service provides transparency and avoids any surprises as the amount agreed and verified by the cardholder using either a PIN or signature at point of sale is exactly the amount charged on the payment card statement.

For additional information regarding SouthState’s Merchant Services program click here.