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Author: Olivia Benson

Increase Holiday Revenue by Adding Gift Cards to Your Small Business

Posted on by Olivia Benson

Gift cards have become a popular choice for both gift-givers and receivers. They’re convenient, versatile, and can be used for any occasion. But for small businesses, gift cards offer more than just a thoughtful present option. They can be a powerful tool to boost sales, customer loyalty, and brand awareness.

Factors Driving Popularity

Several factors contribute to the surge in gift card usage:

  1. Convenience: Gift cards offer a hassle-free gifting experience for both buyers and recipients.
  2. Personalization: This is key to customer satisfaction. Customers appreciate the ability to choose items that align with their preferences and needs. This is especially true when gifting, as gift cards offer a versatile solution by granting recipients the freedom to select their desired items.
  3. Last-Minute Shopping: Gift cards are a go-to solution for procrastinators.
  4. Attractive Incentives: Many retailers sweeten the deal for gift card buyers by providing attractive incentives such as bonus cards, encouraging customers to spend more.

Benefits of Gift Cards for Businesses

For small businesses, implementing a gift card program can offer a multitude of advantages:

  1. Increased sales and revenue: Gift cards not only generate immediate revenue upon sale but also encourage recipients to spend beyond the card’s value, often leading to increased sales.
  2. Customer acquisition and retention: Gift cards can attract new customers to your business and encourage repeat visits. When someone receives a gift card, they are likely to explore your offerings, potentially becoming long-term customers.
  3. Improved customer loyalty: Customers who purchase or receive gift cards often feel a stronger connection to your brand, increasing the likelihood of future purchases.
  4. Data collection and customer insights: Gift card programs provide valuable data on customer spending habits and preferences. This information can help you tailor your marketing strategies and improve your overall business operations.
  5. Marketing opportunities: Gift cards can be used as promotional tools to drive sales and brand awareness during the holidays and other special occasions. They can be used in promotions, discounts, and special offers, helping to attract new customers and retain existing ones.

Our Solutions

We specialize in providing comprehensive gift card solutions to help you create, manage, and promote a successful gift card program.

  1. Design Excellence: Create distinctive gift cards that perfectly align with your brand identity.
  2. Seamless Integration: Effortlessly integrate our solution into your existing point-of-sale ecosystem. Compatible with terminals, POS software, and e-commerce platforms, we streamline your operations and tailor you Gift and Loyalty program to suit your company’s specific needs.
  3. Data-Driven Insights: Make informed decisions with detailed gift card performance analytics.
  4. Dedicated Support: Benefit from our expert assistance every step of the way.
  5. End-to-End Fulfillment: Let us handle gift card production and delivery, from start to finish.
  6. Effective Marketing: Boost gift card sales with our targeted marketing strategies.
  7. Customer Convenience: Empower your customers to easily check gift card balances and easily add funds through our user-friendly portal.
  8. Real-time Insights: Provide instant access to gift card information through a dedicated balance inquiry portal.

Our solutions address the challenges of managing gift card programs, allowing you to focus on what you do best — running your business.

Ready to take your gift card program to the next level? Contact us today for a free consultation and discover how our tailored solutions can benefit your business.

 

Adding gift cards to your small business strategy can significantly boost your holiday revenue, enhance customer loyalty, and increase brand awareness. Don’t miss out on this opportunity to delight your customers this holiday season. Take the first step towards a thriving gift card program today.

The Fine Print on Surcharges

Posted on by Olivia Benson

Maximizing Revenue While Mitigating Risk

Surcharges have become a complex issue for merchants, with varying regulations across jurisdictions and potential financial implications. Understanding the distinction between surcharges and convenience fees, as well as the specific rules governing credit, debit, and prepaid card transactions, is essential for businesses to avoid legal and operational challenges.

Key Takeaways

  1. Surcharging Laws Vary Widely: Surcharge regulations differ significantly between states and even between credit card networks. Merchants must understand the specific rules in their operating area to avoid legal issues.
  2. The Importance of Transparency and Communication: Clear and upfront communication about surcharge policies is essential for maintaining customer satisfaction and preventing disputes. Merchants should inform customers about any additional fees before the point of sale.
  3. Balancing Cost Recovery and Customer Satisfaction: While surcharging can help offset credit card processing costs, excessive fees can deter customers. Merchants must find a balance between recovering costs and maintaining customer loyalty.

What is a Surcharge?

A surcharge is an additional fee imposed by a merchant on a customer’s purchase when a credit
card is used as payment. This fee is distinct from a convenience fee, which may be charged for
using alternative payment methods. Credit card networks have specific rules governing
surcharges, requiring merchants to clearly inform customers about these added costs. While
surcharges are directly linked to credit card use, convenience fees are applied for the added value
or ease of using specific payment options. Merchants must carefully adhere to surcharge
regulations to avoid legal and financial repercussions.

Can U.S. Merchants Add a Surcharge to Credit Card Transactions?

Under current regulations, U.S. merchants can impose surcharges on credit card transactions.
However, there are specific rules about how these surcharges can be applied. Merchants must
choose between a “brand level” surcharge, which is a flat fee for all cards of a particular brand
(e.g., Visa, Mastercard), or a “product level” surcharge, which varies based on the specific type
of credit card (e.g., Visa Signature). The optimal choice depends on a merchant’s customer base
and transaction volume. Regardless of the method, open communication with customers about
the surcharge is essential for maintaining trust and complying with industry regulations.

Is Surcharging Limited to Credit Card Transactions?

Surcharging is strictly prohibited for debit and prepaid card transactions. This restriction is due
to differences in processing costs and consumer protection regulations. While credit card
processing often involves higher fees, debit and prepaid cards typically have lower costs.
Merchants should focus on understanding and complying with the specific rules for each card
type to avoid penalties.

Surcharge Disclosure and Compliance

Merchants must provide clear and upfront information about surcharges to customers. This
includes displaying signage, providing details on receipts, and notifying card networks.
Transparency is crucial for building customer trust and avoiding disputes. Additionally,
merchants must stay informed about state-specific surcharge laws, as these regulations can vary
widely. Non-compliance with surcharge rules can lead to significant penalties and damage a
business’s reputation.

Surcharge Laws and Restrictions

Surcharge laws vary significantly by jurisdiction. Currently, surcharging is prohibited in
Connecticut, Maine, Massachusetts, New York, and Oklahoma. These states have enacted
legislation preventing merchants from imposing additional fees for credit card payments. The
primary reasons for these restrictions are consumer protection and ensuring fair marketplace
practices.

It’s crucial for merchants to familiarize themselves with the surcharge laws in their operating
states. Non-compliance can lead to substantial penalties and legal repercussions. Moreover,
transparent communication about surcharge policies is essential for maintaining customer
satisfaction and avoiding disputes.
While some states permit surcharging, specific regulations and limitations may apply. Merchants
should consult with legal counsel or their payment processor to stay updated on the latest rules
and requirements.

For merchants accepting competing card brands other than Visa and Mastercard, the concept of ‘level playing field’ comes into play.

  • Discover has a non-discrimination policy which states it is permissible to surcharge on
    Discover transactions if all competing cards are surcharged as well; hence the level playing field
    concept. Discover surcharge cannot exceed the Cost of Acceptance for the credit card sale.
  • Amex has a non-discrimination policy, but their regulations require imposing equal treatment
    across all Other Payment products. A payment product is defined as any charge, credit, debit,
    stored value, prepaid, smart card, account access devices or other payment cards, services or
    products other than the Card. Since the Amex requirement includes debit and prepaid products
    and it is against Visa and Mastercard rules to surcharge debit and prepaid products, merchants
    wishing to charge a surcharge would be considered non-compliant (from an Amex rules
    perspective) in certain scenarios.
  • Visa and Mastercard are not subject to the “level playing field” concept since both allow
    surcharging. A merchant may surcharge either one of the brands or both. The merchant cannot
    charge more than the cost of acceptance for their card brand and cannot exceed 4% (even in
    cases where the merchant’s cost of acceptance exceeds 4%) (Visa reduced to 3% effective April
    15, 2023). Canada –2.4%. (Worldpay does not currently support surcharging in Canada).

Navigating the Surcharge Landscape

The dynamic nature of credit card surcharge laws necessitates ongoing vigilance for merchants.
To effectively manage surcharge practices, businesses should:

  • Consult with legal and financial experts: Understand the specific regulations in your
    operating region and how they impact your business.
  • Maintain clear and transparent communication: Inform customers about surcharge
    policies upfront to avoid misunderstandings and disputes.
  • Stay updated on industry changes: Credit card networks and regulatory bodies
    frequently modify surcharge rules, so staying informed is crucial.
  • Consider alternative payment options: Offering discounts for cash or debit card
    payments can help offset credit card processing costs without imposing surcharges.
  • Balance cost recovery with customer satisfaction: While surcharges can help offset
    costs, excessive fees may deter customers.

By carefully considering these factors and adhering to legal requirements, merchants can
successfully navigate the complexities of credit card surcharging while maintaining positive
customer relationships.

ePayment assumes no liability for any errors or omissions in the content. The
information contained herein is not legal advice and is provided on an “as-is” basis
with no guarantees of completeness or accuracy.

Navigating surcharges can be complex. Let our experts guide you through the process. We’ll help you understand the rules, implement effective strategies, and ensure compliance. Contact us today to learn more.

We are here to help

  1. Schedule a Call: Book an Appointment
  2. Send us an eMail: support@epayment.one
  3. Speak to a Specialist: 801-931-0111

Secure Payment Methods Online You Need to Know About

Posted on by Olivia Benson

With the many ways to pay and receive online payments, your customers might prefer the convenience of payment links, the security of ACH, or the speed of digital wallets. As a business owner, staying ahead in the digital age means understanding and offering a variety of secure payment methods.

Key Takeaways

  1. Multiple payment methods are key: Customers prefer different ways to pay online. Businesses should offer a variety of secure options including credit cards, digital wallets, ACH transfers, and payment links.
  2. Each method has its advantages: Consider the pros and cons of each method. Credit cards are widely accepted but have higher fees. Digital wallets are convenient and secure. ACH transfers are cheaper but slower. Payment links streamline invoicing.
  3. Choose based on your business: The best payment methods depend on your business model. E-commerce stores need credit cards. Subscription services might prefer ACH or digital wallets. Freelancers can benefit from payment links.

Ways to accept payments online

So, how can you make sure your business is set up to receive online payments? Let’s explore some popular methods:

1. Online Payment Service Providers (OPSPs)

OPSPs are like the middlemen of online transactions. They securely process payments made with credit cards, debit cards, and sometimes even digital wallets.

  • How it works: You sign up with a service provider. They’ll provide you with a secure way to integrate their payment gateway into your website or app. Customers can then enter their card details seamlessly during checkout.
  • Advantages: Easy to set up, widely accepted by customers, and offers fraud protection.
  • Recommended for: Pretty much any business – from e-commerce stores to subscription services.

2. Digital Wallets and Mobile Payments

Mobile wallets are exploding in popularity. These handy apps store your card information securely, allowing for speedy checkouts with just a tap or a click.

  • How it works: Customers with compatible devices can use their digital wallets during checkout. The payment information is securely transmitted without needing to manually enter card details.
  • Advantages: Carry fewer cards by storing everything from credit cards to loyalty programs in one secure digital location on your phone. Enhanced security features like encryption and fingerprint recognition, reducing the risk of fraud compared to traditional wallets. Make faster purchases by simply tapping your phone to pay, eliminating the need to swipe cards or fumble for cash.
  • Recommended for: Businesses with mobile apps or websites optimized for mobile payments.

3. ACH Payments (eChecks)

ACH, or Automated Clearing House, transfers are a way to move money electronically between bank accounts. They’re essentially electronic versions of checks.

  • What are they?: An ACH transfer debits the customer’s bank account and credits yours, all done electronically. Check this blog to learn more: Automated Clearing House (ACH) – What is it and how does it work?
  • Advantages: Typically come with lower transaction fees compared to credit cards.
  • Recommended for: Businesses that deal in recurring payments or invoices, such as subscription services or B2B transactions.

4. Payment Links and Click-to-Pay Invoices

This method involves sending invoices to your customers electronically, with a handy “pay now” button linked directly to a secure payment gateway.

  • How it works: You create and send an invoice through an invoicing platform or accounting software. These platforms often integrate with popular payment processors, allowing customers to pay instantly through the invoice itself.
  • Advantages: Streamlines the payment process for service-based businesses and freelancers by eliminating the need for manually entering invoice information, saving both you and your customer time; allowing customers to pay from anywhere with an internet connection, increasing the flexibility and convenience of the payment process; automating reminders and notifications, ensuring faster invoice payments and improve your cash flow.
  • Recommended for: Service-based businesses, freelancers, and anyone who sends invoices regularly.

The Perfect Fit: Choosing the Right Option for You

The best way to accept payments online depends on your specific business needs. Consider factors like the type of products or services you offer, and your target audience.

Conclusion

By offering a variety of secure and convenient online payment options, you’re not just making things easier for your customers – you’re opening doors to increased sales. Remember, a happy customer is a returning customer!

We are here to help

  1. Schedule a Call: Book an Appointment
  2. Send us an eMail: support@epayment.one
  3. Speak to a Specialist: 801-931-0111

Sources

  1. National Automated Clearing House Association (NACHA): https://www.nacha.org/
  2. Forbes https://www.forbes.com/
  3. NerdWallet https://www.nerdwallet.com/best/small-business/online-payment-processing-services
  4. HubSpot https://knowledge.hubspot.com/payments/set-up-payments
  5. Small Business Administration (SBA) https://www.sba.gov/

Credit Card Processing Fees: How Much Does It Really Cost?

Posted on by Olivia Benson

The average credit card processing fee for most businesses is between 1.5% and 3.5% of the total transaction. However, these fees can vary depending on the payment types the business accepts and the pricing model the business uses.

Key Takeaways

1.      Credit card processing fees may include interchange fees, network assessment fees, and your payment processor’s markup.

2.      Different pricing models (interchange-plus, tiered, blended) offer varying levels of transparency and cost-efficiency.

3.      Negotiate and explore alternatives: Don’t be afraid to negotiate with us, your processor for better rates. Consider offering ACH bank transfers as a lower-fee payment option for customers.

Understanding the Breakdown: What Goes into Credit Card Processing Fees?

Processing fees are more complex than they seem. Here’s an overview of the key players involved:

1. Interchange Fees: Major credit card networks such as Visa, Mastercard, etc. control the interchange rates. These fees are paid between the issuing bank (that provides the credit card) and the acquiring bank (yours, that receives the payment). Interchange fees are the biggest chunk of your processing costs, varying based on card type (rewards cards and business cards may cost more to process), transaction size, and even your industry [1]. Unfortunately, businesses have little control over interchange fees.

2. Assessment Fees: Think of these as credit card network taxes (Visa, Mastercard, etc.) levied on each transaction. While a smaller percentage than interchange fees, they can add up [2]. Just like interchange fees, these are non-negotiable.

3. Merchant Account Fees: On top of network fees, your payment processor will also charge their own fees to cover their services. Here’s a breakdown of some common ones:

a. Per-transaction fees: A flat fee assessed for each swipe, dip, or tap.

b. Monthly statement fees: A recurring charge for account maintenance and access to monthly statements.

c. PCI Non-Compliance Penalties: PCI compliance helps safeguard customer information. Failing to comply can result in hefty fines. [6] Learn more

d. Chargeback fees: Fees assessed when a customer disputes a transaction and their bank reverses the charges. These can be expensive, so it’s important to have a good fraud prevention system in place.

e. Early termination fees: A penalty for closing your merchant account before the contract ends.

While some fees are unavoidable, your choice of processor will have the greatest impact on the price you pay for accepting credit cards. Different processors offer varying pricing structures and fee rates.

Breakdown by major credit card networks (average interchange and assessment fees):

The actual fees you pay will depend on your specific business and the type of cards you accept.

We can help!

The Many Different Payment Processor Pricing Models

Payment processors offer various pricing models, each with its pros and cons:

1. Interchange-Plus Pricing: This transparent model shows you each fee component (interchange, assessment, processor markup). The advantage? You can negotiate lower per-transaction fees with your processor [4].

2. Tiered Pricing: This bundles fees into pre-determined categories (qualified, mid-qualified, non-qualified) based on factors like card type and acceptance method. While simpler, it can be difficult to predict total processing costs [3].

3. Blended Pricing (or Flat Rate pricing): This combines interchange fees, assessment fees, and processor markup into one simple percentage. It’s easy to understand, but often less transparent and can be more expensive for businesses with high transaction volume [5].

4. Membership-Based Pricing: Here, you pay a monthly subscription fee that covers a certain number of transactions. This can be cost-effective for businesses with predictable transaction volume, but exceeding the included transactions can result in additional fees.

In-person vs. Online Transaction Fees

Generally, online and manually keyed transactions have higher fees compared to in-person transactions. This is because online transactions carry a higher risk of fraud.

Here’s a comparison of in-person vs. online fees for major networks:

The actual fee difference between in-person and online transactions can vary depending on your processor.

Remember, every business is unique. The ideal pricing model depends on your industry, average transaction size, and transaction volume. What works for one business might not be the best fit for yours.

At EPAYMENT, We Tailor Solutions for Your Success

We understand that a one-size-fits-all approach doesn’t work for payment processing. We offer tailored merchant processing solutions to meet the unique needs of your business. Our expert team will analyze your business model and recommend the pricing model that ensures clarity, reliability, and cost-effectiveness in every transaction.

Finding the Right Credit Card Processing Company: Strategies for Savvy Businesses

Knowledge is power, especially when it comes to fees. Here’s how to be a credit card processing pro:

1.      Negotiate with your Payment Processor: You have value! Highlight your business’s strengths (high transaction volume, low chargeback rate) and negotiate lower per-transaction fees or monthly fees.

2.      Choose the Right Pricing Model: If your business processes many rewards cards, interchange-plus might be better for transparency in negotiation. For predictable transaction volume, tiered pricing could work.

3.      Consider Alternative Payment Methods: Explore offering options like ACH bank transfers (lower fees) alongside credit cards to give customers flexibility and potentially lower your overall processing costs.

The type of business you run, your sales volume and average transaction amount all affect costs. While other processors may seem transparent, hidden fees can eat into your profits. At EPAYMENT, we offer custom solutions designed for your business, giving you clear and reliable costs for every transaction.

Let EPAYMENT Help You Find the Perfect Fit and Slash Your Processing Costs!

Contact us today for a free consultation!

Sources

  1. National Retail Federation  https://nrf.com/
  2. Electronic Transactions Association  https://www.electran.org/
  3. Federal Trade Commission  https://www.ftc.gov/
  4.  U.S. Bank Account Services  https://usa.visa.com/
  5. Small Business Administration  https://www.sba.gov/
  6. PCI Security Standards Council  https://www.pcisecuritystandards.org/merchants/

Automated Clearing House (ACH) – What is it and how does it work?

Posted on by Olivia Benson

When it comes to getting paid, businesses have lots of options! Credit cards, mobile wallets, peer-to-peer payments, you name it. But it’s not just about having choices, business owners need to consider what’s most cost-effective and customer friendly. That’s why we love ACH (Automated Clearing House) transactions. It stands out as essential for customer transactions, payroll, and more.

What is the Automated Clearing House (ACH)?

You might not know it, but you may have used ACH payments in the past. The ACH is an electronic system for transferring funds directly between banks and credit unions in the United States. It processes billions of transactions each year, silently powering things like:

  • Direct deposit payroll
  • Recurring bill payments (subscriptions)
  • Large business-to-supplier transactions
  • Tax payments

Key Takeaways

  1. ACH payments are a cost-effective and secure alternative to traditional checks and credit cards. They are ideal for recurring payments and offer faster processing times than checks.
  2. There are two main types of ACH transfers: debits (you pay someone) and credits (someone pays you). Both are generally completed within 1-3 business days.
  3. Businesses can benefit from accepting ACH payments by reducing processing costs, improving customer convenience, and offering a wider range of payment options.

How Does an ACH Transfer Work?

ACH transfers work by moving funds from one bank account to another through the ACH network. There are two main types of ACH transfers:

  • ACH Debit: This is when you authorize a business to take money directly from your checking or savings account, often used for bill payments or recurring charges.
  • ACH Credit: This is when money is electronically deposited into your account, such as with direct deposit for payroll or government benefits.

Here’s a breakdown:

  1. Initiating the Transfer: The transfer is initiated by either the sender (you) or the receiver (the business you are paying).
  2. Network Involvement: The sender’s bank submits the transfer request to the ACH network.
  3. Batching and Settlement: The ACH network batches transfers throughout the day and settles them four times daily.
  4. Funds Movement: The receiver’s bank receives the transfer notification and deposits the funds into the recipient’s account.

ACH vs. Other Payment Methods

 Benefits of ACH Payments

  • Cost-effective: Lower transaction fees compared to credit cards and wire transfers.
  • Convenient: Ideal for recurring payments and eliminates the need for checks.
  • Secure: Reduces the risk of lost or stolen checks and credit card fraud.
  • Faster than checks: Funds transfer electronically in 1-3 business days.

ACH payments are a secure, convenient, and cost-efficient way to transfer funds electronically. Businesses can benefit by offering ACH as a payment option, enhancing customer convenience and potentially reducing processing costs.

Ready to Get Started Accepting ACH Payments?

 Our expert team can help:

  • Evaluate your business needs. Is ACH the right payment strategy for your business?
  • Choose as your payment provider. At EPAYENT we offer a one-stop solution for various payment methods, including ACH, with transparent pricing. We have solutions that integrates with your existing system(s).
  • Set up ACH processing. We can guide you through the setup and integration process, allowing you to focus on what you do best: running your business.

We are here to help:

Sources

1.      National Automated Clearing House Association (NACHA) https://www.nacha.org/

2.      Federal Reserve Payments Study https://www.federalreserve.gov/paymentsystems/fr-payments-study.htm

3.      The Electronic Payments Association https://www.epa.gov/financial/makepayment

Understanding PCI Compliance: A Guide for Merchants

Posted on by Olivia Benson

As a merchant, you’re likely no stranger to the world of credit card transactions. But do you know what it takes to ensure your business is protected from fraudulent activity? PCI compliance is not just a suggestion, it’s a requirement for any business that accepts credit card data. 

What is PCI Compliance?

PCI Compliance refers to the act of adhering to the Payment Card Industry Data Security Standard (PCI DSS), which is a set of rules and regulations designed to protect both your business and customers’ secure data from fraudulent activity. In essence, it’s a system to verify that you’re meeting pre-set security standards to ensure safe credit card transactions.

Do I Have to be Compliant?

With the increasing threat of credit card fraud, the major card brands have made PCI compliance mandatory for all merchants who handle credit card information. This means that you, as a merchant, are required to meet the PCI security standards to ensure the safety of your customers’ sensitive data.

How Can My Business Become Compliant?

First, you have to determine how your organization takes cards and what mechanisms are involved to find your correct Compliance process. Basically, how your organization stores, processes, or transmits payment card data indicates how you can become PCI compliant.

Complete an annual Self-Assessment Questionnaire (SAQ.) With the Self-Assessment Questionnaire, you’ll have the opportunity to review your business’s security protocols and make necessary adjustments to prevent data breaches. This process typically takes around 10 minutes to complete, and our live representatives are available to assist you if needed.

Note, failing to meet PCI compliance requirements can result in fines, audits, and damage to your brand reputation. Stay protected and compliant to ensure the security of your customers’ sensitive information.

Conclusion

Understanding PCI compliance is crucial for merchants like you who accept credit card data. By grasping the importance of PCI compliance and following the guidelines outlined, you can ensure your business is protected from fraudulent activity and avoid costly fines and fees. Be mindful of, becoming compliant and staying compliant is a straightforward process, and with the right guidance, you can safeguard your business and customers’ sensitive data.

We are here to help

Sources

  1. PCI Security Standards Council: https://www.pcisecuritystandards.org/
  2. Visa: https://usa.visa.com/support/small-business/security-compliance.html
  3. Mastercard: https://www.mastercard.us/en-us/business/overview/safety-and-security/security-recommendations/site-data-protection-PCI/merchants-need-to-know.html