How your business can save thousands of dollars a year on credit card transaction fees
A Debit pin pad is an amazing way for a merchant who owns a retail store to save thousands of dollars a year on credit card processing fees, and discount rates. Its simple and very inexpensive to implement.
When you meet with your Bank or an independent credit card processing Co, and discuss opening a merchant account for your new retail business, you know just by the nature of your business, that the average transaction is going to be high.
Always bring up pin debit. Make sure the debit pin pad is bundled into the price of the credit card terminal or just ask for it for free. I have seen in many cases the sales rep will give it away just to make the deal happen.
Once you are set up for pin debit this is how it works. Let’s say for example you have an electronic store, and your average transaction is $250 When a customer presents a debit card swipe the card like a regular credit card. The screen would give you a choice debit or credit punch debit. The debit pin pad would be then activated, hand the customer the pin pad and simply asked them to type in there 4 digit pin number, piece of cake. This is the same pin number they would use to access funds from any ATM machine.
Now here’s the cool thing, and the mega money saver for you as the store owner. Instead of that transaction costing you the discount rate say for example 1.79% Plus a .25 cent transaction fee. Which would be around $4.75; This transaction would cost you the merchant a flat .60 cents wow what a savings.
Let’s try some scenario’s. A $500 flat screen TV. The transaction would cost you the store owner a flat .60 cent. A $1000 plasma TV would be still only be a .60 cent transaction, no matter how large the transaction the fee stays the same. This is just for have a pin pad attached to your credit card machine, and taking the initiative to hand it to the customer.
The first thing you need to be aware of make sure your average credit card transaction is at least $50.00 or more that’s the industry standard break even. If you just convert say 1 out of five debit transaction you just saved a bundle.
This would not be very cost effective on say a small ticket retail store, and never ever have a pin pad in a restaurant. Here are some popular businesses that would benefit from pin debit. Bedding,furniture stores,rug shops,electronic stores,jewelry stores, auto body, auto repair, tire stores, photo studios, art galleries, wedding apparel, sporting good stores, auto dealers, just to name a few, just think large average ticket.
The reason why this transaction is better and so cost effective. Look at a traditional Visa MasterCard transaction that is swiped through the credit card terminal. That transactions goes to Visa MasterCard also called the association or interchange a authorization number is generated and receipt is signed. The way debit works instead of going to Visa MasterCard that transaction travels directly to the debit network, pull out a debit card right now and look at the networks on the back of the card. It might say interlink, plus, cirrus etc. A helpful way of identifying a brainsclub debit card it will say check card or debit card on the from along with the visa, MasterCard logo.
The debit transaction travels to the customers financial institution and back to the merchant thus no interchange or discount rate involved, and the customer still has the same protection from the bank if a charge had to be disputed or if the debit card was lost or stolen.
A lot of credit card processors do not share this great cost saving tool because it cuts into to there profit. I on the other hand have been in the business over 10 years, with the business owners best interest in mind.
I see thousands of merchant credit card statements a year. I’m out in the field daily, and a lot of the processors will try to sneak in really odd little miscellaneous charges that truly add up, for example. A monthly debit access fee on top of a monthly service or statement fee. Base on the statements I’ve reviewed, anywhere from $5.00 a month to $15 in a debit access fees. You can simply asked to have such a fee waived, your paying the .60 cents per transaction fee anyway that’s plenty.
If you have been in business a while and your Bank or processor has not offered pin debit shame on them, your losing a lot of money, and your bottom line is essential to staying in business.
Please don’t hesitate to contact me, If you have any questions regarding debit, any other merchant service questions or would like me to review a merchant processing statement drop me an e-mail, call or fax.