Adrian Floate 10 January - 3 min read
Paying merchant fees might seem like the simple cost of doing business, but the recent surge in eCommerce means it is an area where businesses can save a significant amount of money.
One of the simplest things you can do for your business is conduct a health check on your merchant rates and negotiate a better deal.
Merchant fees are the transaction fees that the merchant bank account must pay whenever a customer uses a debit or credit card to make a purchase.
The fees associated with taking online transactions can be considerably higher than in-store purchases. With more Australian businesses incorporating online stores, they are copping increased charges.
For payments made online, typical transaction rates tend to jump and can be as high as 2 – 3 per cent per sale. This can represent a huge chunk out of business profits.
These high merchant fees on transactions can cost a business thousands of dollars each day.
If you are paying more than 2% in these transaction fees, you’re paying too much.
Types of merchant fees
When looking at potential payment solutions for your online site, understanding the fees is the first step to avoid paying too much.
Merchant fees include:
The key to saving money on merchant fees is to shop around. There has been a proliferation of fintech payment solution providers in Australia in recent years. Competition has driven merchant fees down as new players try to increase their market share.
Ways to save include:
As well as competitive rates, ensure your payments provider offers excellent customer service and supports extensive business integrations.
Many things need to be operating successfully for a profitable business, but the most important factor is cash flow management. Without adequate cash flow, it becomes difficult to pay suppliers, manage stock and cover the everyday expenses of running a business.
As businesses have started using technology more, online payment fraud has become a common problem. Email payment fraud is one of the most common and costly online scams.
Australian small to medium businesses (SMEs) have a cash flow problem and despite government legislation implemented on 1st January 2021, many may not survive if lockdowns and trading restrictions continue.
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