Merchants are losing millions each year by not utilising least cost routing (LCR), but using these steps from Mangala Martinus, businesses can attempt to rectify that.
Mangala Martinus, Managing Director of Payments Consulting Network, was speaking during the online Australian SME Payments Summit when he identified four tips merchants can take to help save on card fees.
“The easiest option, if you don’t want to change providers, is to contact your bank. Firstly, Google the words ‘merchant choice routing’ and the name of your bank. Every major bank and most payment service providers will have a page explaining how to implement LCR and will provide a contact number or an email. Request LCR be enabled and ask them how much to expect to see in savings, you should generally expect a fee saving of five to 10 per cent.”
Martinus said the second option is to ask your industry association if there is a group deal, as some industry associations may have negotiated a group deal with a preferred payment service provider and may have access to strategic merchant rates with the card schemes.
“To give you an idea, we were with an industry group called Corporate Supermarkets in Australia last year, an industry cooperative that had 300 plus stores across their member network, and we were able to help them achieve a 25 per cent fee saving across the board. Which equated to over $3 million per annum base savings for their membership base.”
The third option is to get a pricing comparison. Martinus recommends getting at least two, as well as options from some of the non-major banks, and to also be aware of some of the non-pricing factors as well such as the uptime of the system or whether there have been any downtime issues.
“Do they offer a merchant portal for reporting? Do they offer services across both in-store and e-commerce payments? What’s the settlement timeframe? There’s a whole stack of other factors that you should look at as well.”
The final option Martinus recommends is getting in touch with an expert who might have more knowledge in the field.
“You might already be on a fairly competitive rate, but engage an expert who understands the complexities and capabilities of different providers as understanding the value adds of each organisation can be quite difficult, so that’s where an expert may be useful.”