Swipe, beep, tap. Thanks to modern payment technology, paying for something has never been easier. But while tap-and-go is crazy convenient for customers, the hidden fees in the payment system are anything but convenient for business owners.
Every time a customer pays with a dual-network debit or credit card, you may pay inflated processing fees that dig into your bottom line.
The Banks Have Been Slow to Act
But a simple fix could help you save - the least cost routing (Merchant-choice routing).
.. the National Australia Bank has remarkably only turned the system on for 15 per cent of its merchants and the other major banks offer it to well under half their customers.
When I was told that, I freaked out. How could so many people not have it?
Small business payment processing
In the current payments system, a customer taps their debit or credit card to purchase in your shop, and that payment is without least cost routing, likely being sent through the bank's preferred path on the EFTPOS network, which is not often the cheapest.
But here's the thing - most of those cards also have access to the lower-cost EFTPOS network, but your EFTPOS/Credit systems are not set up to take advantage of this fact. If so, your shop is shouldering unfairly high fees on every card transaction. Why should you be penalised with an excessive fee?
Why Unfair Fees Matter
-
You either absorb the fees and take a hit on your tight margins or pass the costs to customers through higher prices.
-
This makes you dearer as your fees are higher than those with low-cost routing.
-
This stifles competition when businesses are saddled with higher fees
Least Cost Routing Can Instantly Save You Money
Yet least-cost routing could help small businesses across Australia save over $1 billion per year.
With the least cost routing, dual-network card payments are automatically routed through the lowest fee network. This ensures you pay the minimum fees whenever a customer taps their card or buys online from your EFTPOS/Credit provider. Saving just cents per transaction adds up pretty fast.
Reducing card fees for small businesses
Please don't wait for your bank or payment provider to act because they are clearly not acting. You have to take control and access the savings of least-cost routing now.
Step 1: Ask Your Provider
First, contact your payment terminal or POS software provider. Ask if they offer the least-cost routing and whether it is activated for your business. If not, put pressure on them to enable it.
Step 2: Review Your Fees
Take a detailed look at your monthly statements. Identify high credit/debit card fees.
Step 3: Train Your Team
Ensure staff know how to process cards via the EFTPOS network, which can save you money.
Take Action Now for Your Business
Small changes in your business can quickly add up to big savings. But we need your help to pressure the banks and payments giants to enable fair fees for all.
Contact your EFTPOS provider today to enable the least-cost routing. Also, check your monthly statements for excessive card fees to identify possible savings.
With simple advocacy, you can tap into instant savings for your shop. Let's work together to build a fairer payment system for small retailers and consumers.
If you have not done it yet, do it NOW!
