Payment Costs – The Cost of Doing Business
Every small business has to think about how they are going to receive payment for the goods or services they provide their clients and customers.
If you have been in business for a while, you know that almost every payment means some kind of deduction taken off.
The cold hard truth about business today is that banks and other card issuing companies have almost killed off cash exchanges, and in the process have managed to bilk businesses out of some of their hard earned money.
Here are some of the costs that you can expect when you set up the equipment necessary for taking payments in the age of plastic.
Processing Fees
Credit and debit cards have to be processed somehow, and that means money spent by you.
You can do the transactions for a credit card manually, but this type of transaction tends to cost more.
Electronically, you can expect to bear the cost of the machine (either rented or purchased) as well as fees taken by the card and by your bank on every sale.
Middleman Fees
Internet payments can mean that your costs are mitigated somewhat, but you will still have to figure in several deductions.
Sites such as PayPal mean that both the client and the provider are credit card “customers”, that is, neither are charged for the transaction itself.
But you can bet that the charges borne by the site are passed on to you, in the form of deductions from the total pay amount.
Still, it makes payments easy to obtain.
Service Fees
On top of the money charged for the machine, credit and debit companies will charge businesses monthly service fees for reporting account activity.
Just another piece out of the pie.
Be prepared to deal with some or all of these extra charges when you take payment by plastic. Unfortunately, the convenience of the card has meant that the simple days of cash are almost over, and it’s the processing companies who win.
