Six Tips to Minimize Credit Card Processing Fees

No one knows the importance of cutting costs wherever and whenever possible more than those who work in the non-profit sector. At their core, many non-profits function thanks to donations. Unfortunately, in our modern world where credit and debit reign supreme, cash donations are few and far between. Since donations keep many non-profits afloat, it’s very important to make sure you’re reducing your card-processing fees as much as possible.

If you’re a non-profit that relies on funding, you know the uncertainty that often accompanies it. When you’re not sure if funding levels will be maintained year after year, it’s imperative to free up as much room in your budget as possible. Reducing overhead costs such as telecom expenses and processing fees on donations can help to offset the unknown and give your organization some much-needed wiggle room.

Here are six tips to reduce processing fees and make the most of your donation dollars.

You can’t get what you don’t ask for:

In some cases, you can lower your processing fees by asking nicely. If you can provide proof of your non-profit status, (such as your 501(c) status in the United States) your processor could be willing to lower your rate. If your processor is unwilling to offer a lower rate, don’t be afraid to apply pressure and look for other options. They want your business, and they’re often willing to negotiate if they think they’re going to lose it. Remember, your goal for seeking the most competitive processor is finding the one with the lowest markup and greatest value. Some things aren’t negotiable when it comes to processing fees – the markup is not one of them.

Keep an eye on your rates:

Complete monthly audits of your merchant services statements to check for billing errors and avoid rate creep. Processors usually offer seemingly standard contracts, but many contain provisions that allow them to increase your rates. This often comes with the caveat they must notify you first – but those notifications could appear in small print on one of your statements. Be sure to read your statements for notification of rate increases and periodically check your rate to see if it has mysteriously increased. Often, all it takes for them to waive the rate increase is a phone call to object.

Research programs that can reduce your fees:

Many programs out there are tailored to reducing fees for non-profits. One processor covers the majority of fees for donations made through its donation processing page. Others have programs where donators can opt to use their reward points to cover the processing costs of their donations. Do your research, find out if your processors offer these programs, and if they do, put them in to play as soon as possible.

Make sure PCI Compliance is up-to-date:

A vendor will incur monthly fees from the Payment Card Industry (PCI) if its compliance questionnaire is not completed annually. These fees will continue to build up indefinitely until compliance forms are completed. The online questionnaire usually takes less than 30 minutes and saves hundreds of dollars every year. By completing the questionnaire, you assure your credit card processor that you are taking the proper steps to keep customer information safe and minimize the risk of fraud.

Swipe cards and answer questions:

Credit card fees are primarily based on risk. This means you’re better off swiping or inserting a card than entering the number manually. Whenever a number is entered by hand, your processor considers it a higher risk transaction and may charge a higher fee. However, not all organizations have the resources to physically swipe or insert a card. If you’re inputting the card number manually, answer as many of the processor’s questions as possible. Providing information such as the customer’s zip code, debit vs. credit, and the three-digit or four-digit code on the back of the card are all designed to lower the risk of fraud. By entering as much information as possible and lowering the risk, you’ll see reduced transaction fees!

Hire a professional:

An independent merchant services consultant will find you the lowest rates possible in your area, and can also track your rates going forward to make sure you’re never paying more than you should. For example, Schooley Mitchell looks out for your best interests by providing objective advice to reduce your electronic payment processing spend and improve service.

Systematic analysis and auditing will:

• Uncover and eliminate hidden fees
• Identify and recover overcharges and billing errors
• Select and apply appropriate rate categories
• Ensure government legislation is properly applied

Unless there is a compelling reason to carry insurance for your mobile devices, it is typically not cost effective for most people; its shortcomings outweigh its benefits in most situations. Here are a few reasons why we recommend self-insuring instead.

No Guarantees On Replacement Quality

The replacement phones that are provided are typically refurbished and may not even be the same model as the one they are replacing. They often have limited battery life and most device insurers have no obligation to guarantee you any specific make or model to fulfill their end of the bargain.

Your insurance premium is based on the value of your device – not the device you may receive in a replacement claim. Chances are, simply saving the same amount of money each month could pay for a similarly refurbished device, and give you more options to choose from.

Non-Refundable Deductibles

The deductibles that are required for a lost, broken or stolen phone are quite high and may approach the cost of buying a refurbished phone in the open market. These deductibles can range from $150-$250 depending on the version of the device, which is money wasted whether you make a claim or not.

An Ounce Of Prevention…

In most circumstances the likelihood of a phone that is given proper care breaking down is quite small and does not warrant the expense of the insurance. While accidents do happen, mobile devices that are properly cared for usually reach the end of their average lifespan, or at least until most people decide to upgrade. Chances are, you’re never going to make an insurance claim on your mobile device.

…Is Worth A Pound Of Cure

Unfortunately, if you are accident prone, most device insurers won’t put up with you for long. If you do need the insurance and file multiple claims, the insurance company is very likely to drop you. If you’re insistent on insurance, a “maintenance” section in your budget will keep you covered for the same amount as your premium while keeping control of the funds purely in your hands.

Common Problems Don’t Require Replacement

Many problems for personal phones can be resolved at the carrier’s retail stores, the manufacturer’s retail stores, or licensed repair stores. On average, battery, camera, microphone, headphone jack, power button, speaker, charging port and volume button failures can be repaired for under $100. Screen repairs can average anywhere from $150 to $300. It is usually much cheaper to pay for a repair for these common issues than paying an insurance premium over the course of the agreement.

In Conclusion

Most people are better off self-insuring; unless there is a compelling reason to have the insurance coverage you are likely to save money by foregoing the carrier insurance offering. In fact, phone vendors aren’t shy in admitting that device insurance is one of their most profitable services.

A typical personal phone bill is made up of several components, each of which can be managed to provide maximum service at minimal cost. Business plans can be even more complicated thanks to the sheer number of lines associated with a single account. Recent plan changes by the carriers offer consumers new ways to reduce costs and increase user accountability.

The Data Plan

The major carriers have made changes to their data plans that can provide some significant benefits to the consumer, but only if the consumer asks to be put on a new plan.

• The cost per gigabyte of sharable data can be slightly lower than on legacy plans
• The new plans allow for “Carry Over” data for unused data from the prior month
• The new plans also have “Safety Mode” which will protect you from overage charges by offering slower data at no charge when limit is reached or purchase of additional data
• Some plans offer free international calls to Canada and Mexico with the new data plans

Recommendation:  Know how much data you need and make sure that you are on the right plan to support it. If you have family members that are streaming a lot of music and/or video, understand the costs and manage their data usage.

The Equipment Charges

The major wireless carriers have been making a lot of changes to separate the cost of the equipment from the cost of the service.  This offers consumers an opportunity to lower their costs if they can keep their phones longer than the time it takes to pay them off.  Most carriers will charge a monthly equipment fee to pay off the cost of the equipment which is typically between $20-$30 per month depending on the phone.  In exchange for separating the equipment cost from the service cost the carriers have been able to reduce the monthly cost for just the service.

Recommendation: Don’t feel the need to rush out and get a new phone just because you are eligible for an upgrade. The differences between some of the newer smartphones is negligible and often not worth the additional expense of getting a new phone.

The Per-Device Charge

With the equipment costs being separated out from the service costs, the actual cost of the service drops dramatically and becomes quite predictable. The latest plans offer monthly service costs for smartphones at $20 per month, and tablets and other wireless devices at $10 per month.

Recommendation: If you are paying more than $20 per month for your smartphone make sure you understand why. Smartphones can provide the same functionality that a hot spot device does; in most cases there is no need to keep the hot spot device. Tablets can function on WiFi without the need for any carrier fees; if you are paying for service for your tablet make sure that it is really necessary.

Applications and Features

If you find that you are paying for applications and/or vanity features make sure that you are truly getting the value for what you are paying. There are options like Verizon Navigator that made sense before smartphones were the mainstay, but have been since superseded by free-of-charge apps like Google Maps and Waze.

In Summary

The recent move towards separating service and equipment costs makes it much easier to manage the costs of providing personal cell phones to a family or to establish guidelines for reimbursing wireless phone expenses in a business environment.  The account holder can provide a sharable data plan and suitable service plan for each device while holding individual users accountable for new equipment charges, insurance and personal apps and features.

The carriers will not make these changes for you by default, but they are out there for the taking.

The Nokia 9 hasn’t been officially announced yet, but it has already generated quite the buzz. There are lots of rumors about its potential specs, but the newest one is very interesting. According to SlashGear, the Nokia 9 will allegedly be the first smartphone to use the company’s new OZO Audio technology – a software based, VR-targeted development that promises to enable any camera to record 360-degree or full spatial audio.

For OZO audio to work, the Nokia 9 would need at least two microphones, but ideally four. It would also probably require a beefier processor than previous Nokia phones. However, it would mean that Nokia could advertise its latest device as not just a smartphone, but a portable multimedia studio.

This could be good news for Nokia, which failed to make a splash with its last three Android phones – the Nokia 3, 5, and 6. As a company that has yet to develop a premium Android smartphone, Nokia is looking to prove they can hang with the big dogs with the Nokia 9.