In 2021, 90% of card transactions were contactless payments. Apps...
How To Reduce Risk For Your Business
-
Hilly
- 10/01/2022
Discover more
Monek: Our New Trusted Partner Bank
We are excited to announce that BMS is venturing on...
The Benefits of Being a BMS Member
Join as a member discover a wide range of services...
How To Avoid Unnecessary Charges On Your Merchant Bill
Business growth can lead to increased security risk. For SME's,...
Why Strong Customer Authentication (SCA) Matters In-Store
Strong Customer Authentication (SCA) is a security measure embodied within...
As we’re stepping away from a difficult year, it’s important for businesses to ensure they understand all the potential merchant fees that could be unnecessarily eating away profits. A common complication is that most of these fees can be considered convoluted, simply veiled as beneficial to the merchant with no specification.
We’ve developed some important insights into the most common fees found with payment processing, and how Bespoke Merchant Solutions can help reduce risk for 2022.
1. PCI Compliance
In simple terms: PCI-DSS compliance is a security measure ensuring customer data protection through a rigorous set of standards. Being either compliant or non-compliant can introduce potentially unnecessary fees.
There are many discrepancies surrounding fees regarding PCI compliance and non-compliance, this is because exact amounts for fees depends on the processor themselves. Visa and Mastercard do not charge businesses themselves, but rather is a varying fee that generates revenue for the payment processor.
The amount of the fee can depend on the circumstances, for non-compliance, in a monthly spread, it can rack up to £100 a month. However, a data breach can induce a hefty fee under investigation if you’re found to be non-compliant. Not only this, but it has significant implications for your brand reputation and potential legal costs.
On top of this, becoming PCI-compliant can be a costly and lengthy process that can often leave businesses in a vulnerable position when starting up.
2. Monthly Minimum Fees
Minimum Monthly Charges (MMC) are not necessarily a fee, but rather a benchmark or monthly quota given by the payment processor. If the business fails to meet this quota, then they’ll need to pay back out of their own pocket.
The issue here is that it places unnecessary pressure on smaller businesses to meet a monthly quota of transaction rates, regardless of whether it has been a slow month for revenue. In other words, let’s say a business generates revenue of £3000 within a month, and this measures out to £35 in processing fees from all transactions, if they do not meet a £40 quota, they’ll have to pay that themselves.
MMC’s are often justified by suggesting it funds all the services offered by the payment processor. However, it should not be at the expense of business performance.
3. Chargeback Process
A chargeback is simply a refund that it’s issued from the consumer directly to the bank, eliminating much of the middle-man communication with the merchant.
Processing a chargeback can build some serious financial costs which can be broken down by the following:
- Transaction fees: when it comes to payment processing transaction rates, if the purchase results in a chargeback, that’s your revenue wasted.
- Marketing: when sales become chargebacks, this can often result in hurting your marketing process and budget
- Base Chargeback fee: there is an understood base penalty fee from your bank – usually anywhere from 15 to 40%
Dealing with chargebacks can often leave businesses vulnerable and can derail business plans in the long run when the budget stretches thin.
4. What BMS Can Do?
Avoiding unnecessary charges is vital for smaller businesses to gain footing in 2022.
PCI Compliance has been streamlined and is handled by our Account Managers with any new contract. We do not impose a monthly fee for our additional services nor set a benchmark to reach. Finally, if a merchant comes to us with a chargeback situation, our team can conduct a free investigation into the claim and be supportive during the complicated process.
For more information, or if you have any questions, get in touch below.
More from BMS
Payment & Merchant Insights
Here’s Why You Should Switch To Digital Money Now
In 2021, 90% of card transactions were contactless payments. Apps such as Apple Pay and the Google Wallet have given consumers the choice and flexibility to pay extremely quickly using their smart devices. We wanted to see how widely adopted digital wallets have become and why.
April 24, 2023
BMS Updates
Monek: Our New Trusted Partner Bank
We are excited to announce that BMS is venturing on with a new partnership with the merchant bank Monek.
March 28, 2023
BMS Updates
The Benefits of Being a BMS Member
Join as a member discover a wide range of services made especially for smaller merchant businesses looking to find the best way to operate.
February 27, 2023