Did You Open Your Business to Save Money or Make Money?

Over the last 20 years I have seen merchant account services providers scramble for new ways to gain merchant’s attention by telling them they will save them money on their credit card processing rates and fees. Some merchants will gladly change to save even $20 a month, after all it’s their hard earned money and why should they give away a penny more than they have to?

But I challenge you to find a single merchant that started their own business just to save money. Can you imagine a future business owner thinking to themselves “Gee, I really like saving money. I wonder how much money I could save next year by opening a business and comparing merchant service providers to get the best deal.” Not likely. Today’s small and mid-sized business owners considered the risks vs. the opportunity, researched different business models and found the one that best fit their knowledge and strengths.

Ask a business owner how much money they saved last year and they won’t know. But ask them how much money they earned last year and they will know down to the penny. Why? Because they didn’t open their doors just to save a few bucks. They got in to business so they could determine their own worth and earn more money than they could otherwise. They know exactly how much they reported in earnings to the IRS last year because that is what is most important to them.

If this is true, then why do merchants change credit card processors at all? Well, for the same reason that people change cell phone providers, or television and internet providers. Everyone wants to get a better deal. But, what happens when that better deal turns out to be either the same deal or not quite as good as the one you had before? Can you go back to your old provider? Usually, you can’t. Just like other service providers, merchant service agreements typically carry a 3-year term. And the fact is, all providers have to pay the same interchange rates. So, how much can they really save you?

In addition to saving you money on your credit card processing rates, a good merchant services provider should also show you how to increase your revenues with value-added products and services. For example, gift and loyalty card programs which generate added revenue and drive new customers to your business can really impact your bottom line. Did they educate you about the coming EMV requirements and are they providing you with the best in customer care? What is your time worth when you are on hold being tossed through a voicemail system when you could be servicing more customers?

So rather than just making your decision on who earns your credit card processing business by who has the lowest rate, make sure you are also being offered the same products and services as your competitors and bring your customers coming back to you time after time.