Almost 0% to Accept Credit Cards
There is a solution where merchants can pass on their high credit card fees to their customers. While this will not negate merchant processing fees entirely, it will dramatically reduce their costs. This solution only works on credit card transactions, and not on debit card transactions, which explains why there will still be credit card processing fees, but drastically reduced. Merchants in the short-term rental space will usually see about 80% of their transactions done with a credit card and 20% with debit cards. Imagine the savings of passing on those credit card fees to your customers. What could merchants do with that money saved? Let us look at this idea a little bit more in depth.
The Benefits of Passing On Credit Card Fees
Owning one property to owning hundreds of properties, each business can benefit from passing on their credit card fees to the customer:
- Ability to keep more revenue.
- Allocate these savings to other parts of the business to keep growing.
- Enables struggling merchants to avoid layoffs.
- Enables merchants to lower prices that already have their credit card fees blended into it.
- Lowering prices can increase their SEO.
- Undercut competition with ability to lower prices.
- Merchants do not have to worry about losing customers as they will have the option to pay with debit cards, rather than with credit cards with its fees passed onto them.
- Lower costs in taking cards as debit transactions have a much less cost of acceptance compared to credit cards.
- Ability to push ACH transactions that have less fees compared to taking card transactions.
- Lower Risk of fraud involved with accepting debit cards.
- Revenue saved will enable companies to grow and expand at a faster rate than their competitors.
- Merchants processing at high volumes will see a large amount in savings.
- Merchants processing at lower volume will be able to retain higher cash flow.
To find out more information on this solution, please contact firstname.lastname@example.org.
Already doing this? Great! But Are You Compliant?
Some merchants, with the use of their PMS solutions, are already passing on fees to their customers to offset their credit card transactions. But they are most likely doing this incorrectly, in a non-compliant way. Why should merchants care about being compliant or not? Well, to pass the credit card processing fees to the customer, the merchant must adhere to rules set forth by the card brands such as Visa and MasterCard. These card brands have strict regulations for merchants who wish to pass on their credit card fees to the consumer. For example, it is illegal to practice this in 4 states.
Let us look at this at another angle. Some merchants who had been set up with Stripe enjoyed getting set up and approved without a problem within 24 hours. Yet, these same merchants saw their accounts deactivated or had their funds held without notice because they were set up incorrectly in the beginning. So, the question merchants must ask themselves is: can they afford to have any hiccups with their funds at any time during this Pandemic?
To find out more information, contact us email@example.com.