While it’s a rewarding journey, running an eCommerce business comes with its share of challenges. Many of these relate to additional costs, especially when we’re talking about acquiring fees. The good news, however, is that a lot of these challenges can be addressed before they add up. Keep reading and you’ll find out how.
What are common merchant charges?
Some common merchant fees are listed below, as are the possible problems that relate to each of them. It’s important to bear in mind that all charges should be reviewed every two years or so.
• Authorisation fees: This fee is triggered on a transaction-by-transaction basis. Be aware that this price is fixed, so if you sell products such as coffee – and your average transaction volume is low – then your overall costs could go up as a result.
• Percentage-based fees: This fee is available in two variants – blended and unblended. While the former of these is more popular, any savings made remain with the payment service provider. Unblended fee surpluses, comparatively, go to the merchant.
• Card scheme fees: Visa, Mastercard and similar card fees will likely charge a fee if you process payments in a different currency to the region you operate. Although this isn’t so much of a problem for online stores that earn a lot, it can be for smaller merchants.
How can these problems be solved?
The first thing to be sure of is that your online store is compliant with all local regulations. Regardless of the provider and revenue model you choose, you’ll be fined for each month that you aren’t PCI compliant. For the average merchant, achieving this is merely a case of completing your partner’s portal questions. A simple way to save money, right?
When it comes to fee types, it’s important to think about the services you offer. If you offer customers the option to pay with more currency types, you’ll have to endure the foreign exchange fees that come with this. If you operate solely in Europe, for example, we recommend just enabling the possibility to pay in Euros. If you do choose to accept more currencies, however, make sure you know the exact rate your provider will charge you for each transaction.
Assessing your median transaction volume is just as important. If the average total of each payment you process is under £10, you might be better off looking for a solution which doesn’t charge the same sum for each completed sale. If you’re unsure on which model suits your business best, it’s always worth reaching out for advice.
One other way of saving money is through Visa/ Mastercard credit. Interchange fees, for both of these schemes, dropped for personal credit cards in Europe not too long ago. Another cost is also coming soon, but this time for international transactions. It’s therefore worth asking your payment provider how you can already benefit, if operating in Europe, or what you’ll be eligible for if you’re elsewhere and anticipating these changes.
To summarise...
Merchants can often find acquiring fees challenging, but with a bit of smart thinking it’s possible to combat such issues with minimal difficulty. No matter what you get charged for, there is always the opportunity to reduce your costs. Knowing how much your customers spend on average with you, keeping updated with card scheme regulations and choosing an omni-channel payment gateway where you can analyse everything will all help to increase your revenue over time.
emerchantpay is able to provide a fee assessment session, so that merchants know the destination for all of their outgoing payments. To find out more, please contact us.