As a business owner, managing costs is always top of mind— and when it comes to how you get paid, processing costs are not excluded from the tally. Often felt as a necessary trade-off for the “cost of business” to meet changing customer needs, merchants have played their part in the credit card processing cycle by bearing the cost of processing fees. Now there is a way to help reduce your costs while offering your customers the convenience they crave, introducing Helcim Fee Saver.
The weight of payment processing costs to business owners
While accepting payment methods such as credit cards allows you to offer flexible options to satisfy your customers and get paid, the cost of payment processing has been a hot topic for merchants in an age-old feud between business owners and the card brand networks.
Customers want to be able to pay in the most convenient form, such as credit cards which offer rewards programs, credit limits, and more. Business owners also want their customer’s business, knowing that the other furniture store down the street might accept credit card payments and are willing to eat the processing fee to make the sale. This challenges businesses to make the best decision when it comes to choosing a merchant service provider, especially as interchange rates have been steadily climbing over the past decade.
However, in light of that information and with much effort on the part of merchants, card brands like Visa and Mastercard have been mandated to allow surcharging and convenience fees. They don’t make it easy, though, with strict compliance regulations and specific state and provincial laws, all of which have their own legal requirements (it’s still not legal in every state).
What are credit card processing fees made of?
First, it is helpful to know that not all processing costs are equal, and rates will fluctuate depending on your provider, pricing model, and type of transaction.
Flat rate providers will charge you a flat rate processing fee for each online, keyed or over-the-phone, and in-person transaction. Their processing costs are set to cover their costs to buffer the fluctuating interchange fee but also make a profit. The interchange fee is the cost of the transaction to the card brand networks and banks. So while the transaction to a flat-rate payment processor like Square may only cost them 1.45% + $0.00 to facilitate, they are buffering their bottom line and charging you 2%, for example, pocketing the margin.
Interchange Plus providers, on the other hand, will pass on the interchange fee with a set margin on every type of transaction, which is a much smaller profit margin for them and may result in more savings for you depending on what type of industry you are in and what type of card and transaction you are processing.
So, to sum it up, your processing fees are typically made up of the interchange fee (determined by the banks and the card brand networks) and your payment processor’s margin. Whether that is a set rate, Interchange Plus, or another pricing model depends on your payment processor.
What are credit card surcharges and convenience fees?
Typically, business owners have three methods of recourse to try and recoup the cost of payment processing: Increasing their prices, charging a convenience fee for using select transaction types or surcharging for paying with certain payment methods such as credit cards. There are rules and regulations for the latter two, which are governed by the card brands and require compliance and registration before a business can implement a surcharge or convenience fee.
Anti-competitive laws, specific card brand rules, and surcharge caps can make abiding by all the card brand rules a little like an obstacle course, with heavy penalties waiting for business owners to trip into.
What is the Helcim Fee Saver?
Helcim Fee Saver simplifies complex card brand rules on surcharging and convenience fees for small businesses, allowing them to pass on their credit card processing fees to their customers or clients easily. Eligible Helcim merchants can enjoy zero-cost payment processing whenever they send invoices or when they embed payment flows on their website through HelcimPay.js.
This will appear separately on the customer’s invoices and receipts.
Your customers and clients will always have the choice between using a credit card or ACH bank payments. If they opt for credit card payment, the processing fees will be passed on to your customers in the form of a set cost, depending on the card brand. However, if they don’t want to pay the fee and choose to pay with ACH payments, it’s a win-win for you both. While your customer won’t have any added expenses, you also benefit from lower processing rates as ACH processing costs are significantly lower than credit card processing fees and capped at $6 per transaction.
How does the Helcim Fee Saver work?
This new tool works seamlessly with your existing free Helcim invoicing and HelcimPay.js tools when you enable Helcim Fee Saver and ACH bank-to-bank payments. When a customer pays you via Helcim Invoicing or HelcimPay.J.S, you can now implement a flat “convenience fee” on those online credit card transactions or give them the option to pay via ACH bank transfer.
As a Helcim merchant, you can get started by simply enabling Helcim Fee Saver in your settings on your dashboard.
If you are a developer integrating HelcimPay.js on your website, platform, or software, you can also enable Helcim Fee Saver as long as you are eligible to accept ACH payments and have that payment method enabled for your customers.
Enabling smarter tools that work for you to save you money
While Helcim is committed to becoming the most loved payments company, that means making payment processing simple and affordable. We show this commitment by continuously improving our tools and products and finding new ways to simplify your business and make payments easier. The Helcim Fee Saver is your way of encouraging customers to try ACH payments and reduce your processing costs while recouping some of those costs to your business for the convenience of accepting other flexible payment methods.
Learn more about the Helcim Fee Saver today →