For many small businesses, increasing profit margin is a difficult task in today’s economy. “If retailers in general operate under a thin profit margin, then small retailers operate under an ultra-thin profit margin,” says Mallory Duncan, senior vice president and general counsel of the National Retail Federation.
One way to combat dwindling profit, however, is analyzing your credit card processing. “Swipe fees”–the percentage a credit card company charges per sale–can cripple a small business’ revenue (see diagram).
Credit Card Interchange - Source:GAO
And the problem? These fees are steadily rising. According to David Robertson, publisher of payment-industry web newsletter The Nilson Report, merchants paid over $62 billion in “swipe fees” in 2008, up from $16 billion in 2001.
At ShopJimmy, we spent a good chunk of this past summer researching our credit card processing system and requesting quotes from a variety of companies. Our findings? It’s important to regularly check your fees, request quotes, and negotiate with your processor to find savings. “There is a lot of competition in the business, and competition offers the opportunity for merchants to really shop around and see what is the best deal or the best service they can get,” says Jamie Savant, a partner at the Strawhecker Group, a payments-industry consultant.
During our research, we found BCS Worldwide. It’s a local (St. Paul, MN), family-owned company with a great reputation for low fees, quality customer service, and a good “corporate social responsibility” track record. Click here to learn more about BCS Worldwide and apply for a quote!