The first few weeks of the new year are always a great time for reflection, no matter who you are.
And if you’re a business owner, it’s the perfect time to take stock of everything related to your business.
Whether it’s setting objectives for the coming year, determining whether you reached the goals you set last year, or just looking for the cheapest payment processing, those first few weeks of the new year are easily the best time to do this sort of thing.
And with the holiday shopping season coming to a close, and the new year just around the corner, you should start thinking about this stuff now.
Because the truth is there are still far too many business owners out there who are paying through the nose to process payments, and if you’re one of them, now is definitely the time when you should be weighing your options.
So, if you’re thinking about switching payment processors, but you’re not sure how to go about doing it, then you should definitely keep reading.
This article explores why the best time to switch payment providers is early in the new year, explains how smaller local providers like us may be able to give you the best possible deal, and offers advice on what to consider if you’re looking for the cheapest payment processing.
Why Is Now the Best Time to Find the Cheapest Payment Processing?
Typically, December and February are the months when businesses see the highest volume of sales, as people tend to spend more money during these months shopping for Christmas and Valentine’s Day.
That being said, if you’re looking for the cheapest payment processing, then early in the new year is the best possible time.
But why is that?
Well, for one thing, reviewing your statements during the months when you’re doing the highest volume of sales will give you a better idea of what you’re actually paying, and the kinds of cards your customers tend to use.
At the same time, our industry is extremely convoluted, so as the Christmas rush slows down, and January rolls around, you’ll have some downtime to really sink your teeth into this stuff and get a better understanding of how our industry works, which will make it easier for you to get a good deal.
What’s more, one of the ways we work to save money for business owners like you is by doing a Rate Reduction Review, where we’ll analyze your last statement from your current provider so we can see the volume of credit transactions you’ve had, what kinds of credit cards your customers tend to use, and the interchange rates and other fees attached to those cards.
This allows us to determine where you’re spending the most, and what we can do to save you money by adjusting our rates.
What’s more, once January is here, your last statement would be from December, when you probably had significantly higher sales.
And if we analyze that statement, it’ll allow us to figure out how much you’re spending during high-volume months, which will give us a much better idea of the kind of savings we’re able to offer.
At this point, if you do choose to switch, we’ll also know how to adjust our rates so you can see significant savings in February, when you’re likely to see much higher volume again.
Simultaneously, this also gives us the opportunity to determine whether or not your provider is inflating your rates during high-volume months and will also allow us to break down everything on your bill, so you can actually understand what you’ve been paying for.
How Can Smaller Providers Offer the Cheapest Payment Processing?
We can’t speak for every payment processor out there, but typically, it’s the smaller providers who are able to offer the cheapest payment processing.
The main reason for this is that the big players in this industry tend to be multi-billion-dollar operations, and that means they have thousands of employees and massive overhead.
This means that they really can’t afford to give you a good deal, and they also have very little incentive to even try to be competitive.
Because for years, these companies were the only options for payment processing, so they’ve built trust and familiarity in their brands, and as a result, they’re pretty much guaranteed a steady stream of customers and therefore have no incentive to lower their prices.
Moreover, smaller processors know what it’s like to be a small business, so they can relate to what you’re going through and are more likely to want to give you a better price.
If you’d like to learn more about why the big payment processors won’t give you a better deal, you should check out our article on Two of the Biggest Myths About Payment Processing.
What’s more, because providers like us are struggling to compete against the behemoths of the banking industry, we have much more appreciation for each and every one of our customers.
And although we can’t speak for other processors, unlike the big banks, who like to treat everyone with the same cookie-cutter approach, we take the time to do everything on a case-by-case basis, working with clients to provide a personalized service that addresses their unique needs.
For example, if you’re primarily doing business online, where the interchange fees tend to be higher, then we’ll look at how we can lower our markup on those transactions. Or, if you mainly accept debit payments, then we’ll see what we can do to reduce our markup on those.
Some Other Things to Consider
Aside from everything we’ve already mentioned, there are a couple of other things you’re going to want to take into consideration, including the type of pricing processors use and the quality of the payment terminals they provide for their customers.
With that in mind, let’s look at why these aspects are so important to consider when you’re looking for the cheapest payment processing and thinking about switching to a new payment provider.
Pricing
The payment processing industry is notoriously tough to understand, not least when it comes to the way companies charge for their services.
For instance, many companies will charge a flat rate, meaning you pay the exact same interchange rate on every card a customer uses, no matter what.
This is often advertised as a way to save money, and a more convenient way to pay, when compared to other pricing models.
Unfortunately, nothing could be further from the truth, and flat-rate pricing almost always ends up being the most expensive way to pay, as the flat rates companies charge tend to be considerably higher than what you’d pay on most credit cards.
Other processors will offer a “discounted” rate, but then tack a bunch of miscellaneous fees onto your bill to make up for it.
If you’d like to learn how to spot this sort of thing, you should read our article, which explains What You Need to Know to Spot Hidden Payment Processing Fees.
We, on the other hand, pride ourselves on using interchange plus pricing, which means that when credit card companies lower their rates, that will always be reflected on your bill, and we’ll never inflate our rates or use other deceptive ways to make up the difference.
If you’d like to learn more about interchange plus pricing, you should read our article on Why Interchange Plus Pricing Is the Best Way to Pay for Payment Processing.
Payment Terminals
Believe it or not, many payment processors provide payment terminals that are old, beat up, or about to become obsolete.
This is true of many providers, including the giant corporations that dominate this industry.
These machines are much slower than newer ones, and many of them can’t process popular forms of payment, like Apple Pay and even contactless payments.
So, if you’re thinking about switching payment processors, make sure to research the processors you’re considering and ensure their payment terminals are up-to-date, and can accept all the latest forms of payment.
This is incredibly important to look into, as it can have a significant effect on your business, not least because you may have to turn away some customers depending on what form of payment they want to use.
And no matter what rates a processor is charging, if you’re going to have to turn customers away, or have ongoing problems with your payment terminals, it’s not going to be worth it.
Over the years, we’ve been shocked to see how rundown and outdated a lot of these terminals are, and the effect that this is having on business owners.
That being said, we’ve made a commitment to always provide our clients with new, state-of-the-art equipment, which helps their businesses to be more productive, profitable, and flexible.
Are you still searching for the cheapest payment processing? Book a Rate Reduction Review to find out how much you can save with Lucid Payments or contact us for more information.
