In order to succeed today, businesses serving customers need to be able to take card payments. But what many business owners may not realise is that every swipe or beep of the handheld EPOS terminal comes at a cost. While the payment may take no more than a few seconds, there are a myriad of processes happening on the backend to ensure the payment goes through and ends up in your business bank account.
One of those processes is merchant acquiring. You might not have heard of it before, but it’s something that costs you money every time you receive a card payment. The issue is that not all merchant acquirers are the same, with some charging a great deal more for their services than others.
This hidden cost could creep up on your business and just by making a switch to a more competitive provider you could recoup hundreds, if not thousands, back on your bottom line each year.
But before explaining how you can save money by partnering with an experienced and competitively-priced merchant acquiring partner, it’s worth explaining the acquiring process so you can understand precisely what you receive for your money.
What is a Merchant Acquirer?
Going by many names (including acquiring bank), a merchant acquirer is a financial institution that is a fully licensed member of major card networks (such as Visa and Mastercard) that handles the backend of the process by facilitating communication between the issuing bank (cardholder’s bank) and your merchant bank (business bank account).
There are only so many acquirers in existence since the compliance requirements of major card networks are pretty strict. That’s why you often see businesses only offering one or two major card brands. It’s because their acquirer can only process payments made on those networks.
If you’re still a little confused, it’s worth explaining what happens during a payment to give you a better understanding of the role they play.
What Does a Merchant Acquirer Do?
As mentioned, it’s worth running through a quick example scenario so you can better understand the role a merchant acquirer plays in your business.
Let’s say your restaurant takes a contactless payment on your EPOS system. In that case, once the payment gateway connected to the system has processed the payment details, the transaction will arrive at your merchant acquirer.
They are subsequently responsible for:
Authorisation — asking the issuer (your customer’s bank) whether the card is valid and there are sufficient funds in the account to complete the transaction.
Authentication — a required verification of the cardholder’s identity, which is carried out after typing in the card details during purchase. Authentication is usually performed using 3D Secure 2, the latest form of security software and a requirement of almost all major card brands.
Once those checks have been completed, the payment has the go-ahead, and the merchant acquirer ensures that the money arrives in your merchant account.
How Do Merchant Acquirers Make Money? What Factors Influence The Charges Businesses Pay?
In almost all scenarios, merchant acquirers charge a fee per transaction. There are several ways in which an operator in this space might do this. For example, it could be a flat fee per transaction. In comparison, other institutions may charge a percentage that decreases in line with the volume of payments processed.
Some impose processing limits to ensure they cover the costs associated with network processing and merchant account-related services, with hefty fines if you go over. Others stipulate minimum transaction volumes to keep you as a customer.
Another factor in the cost per transaction is whether your merchant acquirer provides acquiring services only or provides an end-to-end payments solution, including payment processing and gateway services.
Lastly, merchant acquirers differentiate themselves on several features. Some offer more currencies than others, whereas competitors might have a more impressive array of security technology to protect you from fraudulent payments.
You simply have to weigh up what is best for your business and make a decision based on your specific needs. For example, if you need 24/7 support for your merchant services, look for a provider who can offer you that option.
However, this is something few business owners do. They often pay comparatively expensive rates without realising, costing them hundreds (or thousands in the case of high-volume businesses) every year.
How Can You Save Money On Merchant Acquiring Rates?
As is the case with many aspects of business, one of the best ways to secure reduced rates is to negotiate. You can also look at combining all services involved in processing a payment into one understandable price, so you know exactly what you pay on each card transaction.
However, even if you are a business getting through a lot of transactions, the best way to secure the highest possible discount on your merchant acquirer rates is to partner up with a merchant services firm. These outfits have hundreds of thousands of businesses as clients and longstanding relationships with all leading acquirers. Thus, they can wield far more buying power than you ever could, even if you owned several businesses.
Not only can they secure a competitive price for your payment processing, but they can handle all elements under one roof. Rather than paying as many as five different fees per transaction, you can pay a single cost-effective fee.
Choose MCR Systems to Secure Significant Savings on Your Payment Processing Today
At MCR Systems, we offer hassle-free, competitive merchant services to our clients. In addition to our industry-leading POS technology, our merchant partner (Vesta Merchant Services) ensures that you pay the best possible rates for your payment processing.
By switching today, you could save as much as 50% off your current pricing structure. Better yet, we’ll even offer to buy you out of the remainder of your current contract. With no hidden costs, easy setup, and support available 24/7, there’s no reason not to add our best-in-class merchant services solutions to your POS system.
Merchant acquiring fees could be covertly weighing down your bottom line. If you would like to learn more about how much you could save on your merchant acquiring fees, feel free to call us on 0116 299 7000 or fill out our online contact form with a few details regarding your business, and we’ll be in touch within 24 hours.