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Credit card processing is an essential part of any business, but it can also be a complex and confusing process. One of the most important decisions a business must make when it comes to credit card processing is choosing the right pricing model. The two main pricing models used by credit card processors are Interchange Plus and Tiered pricing. Interchange Plus pricing is a pricing model that separates the fees charged by the card networks (interchange) from the fees charged by the processor. This means that businesses can see exactly how much they are paying for each transaction. On the other hand, Tiered pricing, also known as bundled pricing, groups all of the fees together into a single rate for each transaction, making it difficult to understand exactly how much you’re paying for each transaction. Here are some key reasons why Interchange Plus pricing is the better option for businesses: Transparency: With Interchange Plus pricing, businesses can see exactly what they are paying for each transaction. This allows them to identify any potential issues or areas for improvement in their processing costs. With Tiered pricing, it can be difficult to understand how much you’re paying for each transaction, as the fees are bundled together into one rate. Cost savings: Interchange Plus pricing can be less expensive than Tiered pricing. This is because Tiered pricing often includes markups on the interchange rates, which can add up over time. With Interchange Plus pricing, businesses can see exactly what they are paying and can negotiate lower rates with their processor based on their specific needs and processing volume. Flexibility: Interchange Plus pricing allows businesses to adapt more easily to changes in the payments industry, such as the emergence of new technologies. Tiered pricing, on the other hand, can lock businesses into outdated pricing structures, which can make it difficult for them to adapt to new developments. Future-proofing: As the payments industry evolves and new technologies emerge, Interchange Plus pricing allows businesses to adapt more easily. Tiered pricing can lock businesses into outdated pricing structures, which can make it difficult for them to take advantage of new technologies and innovations. Control: Interchange Plus pricing gives businesses more control over their processing costs. Businesses can monitor their costs and make adjustments as needed, rather than being at the mercy of unpredictable bundled pricing. It’s important to note that Interchange Plus pricing can also have some downsides, such as the possibility of additional fees, and the need for more monitoring and management. However, the benefits of Interchange Plus pricing far outweigh the downsides, making it the better option for businesses. In conclusion, Interchange Plus pricing is the better option for businesses because it provides greater transparency, cost savings, flexibility, future-proofing and control. It’s important for businesses to understand the difference between Interchange Plus and Tiered pricing and to carefully review the fees and terms offered by different processors. By doing so, businesses can ensure they are getting the best deal and that their payments infrastructure is set up for success. If you’d like to learn more, please contact Centurion Payment Services today to learn more and get set up with the pricing model best for your business.
We are living in the digital era, where technology is growing at a fast speed. Every second you come across an innovation. Within a short period, the innovations are embraced by people for increasing convenience. If you consider the business section, you will get to know about a lot of changes that take place now and then. These days, business is not being carried out by using cash payments or checks. People prefer to use credit cards, debit cards, or QR scan for payments. Still, many businesses have not employed online payment systems or accepted credit cards. When small businesses do not have a merchant account, they cannot accept card payments or through QR scans. You will lose out on customers and face a reduction in the businesses. Sometimes the businesses have to shut down if they are not embracing the latest technology. Merchant Accounts are essential for small businesses because then, they can accept payments in different modes. Just open a merchant account and observe the new opportunities to which you can open up. It will be a great way to add value to your company. Here are some of the reasons that will help you understand why a merchant account is essential for small businesses. #1 When You Have A Merchant Account, You Can Accept Different Payment Modes The best aspect of having a merchant account for small businesses is to have the flexibility to accept different types of payment methods. If the customer is not carrying cash, then you can accept payment through credit cards, debit cards, or QR scanning. It becomes so easy and convenient for the customers to purchase through an online payment system. If you do not have a merchant account, your business will accept payments only through cash. It will become inconvenient for the customer. In such cases, the customer will not be willing to visit your store again. When your business has a merchant account, it shows that you are prioritizing your customers. It will help minimize the inconvenience between the buying and selling process. #2 Merchant Account Will Help In Increasing Sales In a recent study, it was observed that customers tend to spend a lot when they use credit cards. With cash payments, people feel restricted and end up buying less than required. With credit cards, the situation is a bit opposite. This shows that your business will have good sales when you are accepting credit card payments or have a merchant account. In a separate survey conducted for gauging the preferences of credit card payments over cash payments, the results were astonishing. People prefer to use credit card payments. They will choose credit card payments for payment flexibility and convenience. It will increase business sales and support overall business growth. #3 Merchant Account Helps In Proper Money Management Switching to a merchant account by embracing credit cards, debit cards, and online payments helps your business. It will support streamlining all online payments. You no longer have to count the cash and require manual efforts. The merchant account will maintain the transaction details and record them for a prolonged period. Moreover, you can also analyze cash flow forecasting. #4 You Can Easily Avoid Bad Checks Or Other Issues You can use the merchant account and the services offered along with it to avoid the issues of bad checks or any other issues. The transactions are hassle-free, and no cost is associated with the merchant account services. If you link your merchant account with another payment system, you can make recurring payments flexible. #5 You Can Increase Customer Convenience — Have a Huge Client Base Of Happy Customers When a small merchant has an account, it ensures that your customers are happy. What makes customers happy? First, your business products and services. Apart from that, customers are always looking for convenient services. With a merchant account, you are making the payment convenient for them. It becomes easy for the customers to make payments through credit cards and debit cards. It will improve the customer experience and help you build a better network with the customers. Summary: Now that you know the significance of a merchant account, it is easier to integrate a merchant account into your business payment system. Having a merchant account is not just essential for small businesses but for every business. If you consider customers as your priority, you need to have a merchant account.
