Question posed by Fred in California who owns an auto tire and repair shop.
In a nut shell- no.
Fred only accepts cards if the owner is present and can show a valid photo id such as a drivers license. They never take cards over the phone. They get a lot of special cards such as Pacific Gas & Electric and very little consumer cards.
Volume: a few thousand per month
Let’s make some assumptions and create scenario’s:
Estimated total processing at $36,000 per year
Average 4% or $1440 in processing costs.
He switches and reduced his average cost to 3.2% or $1152.
Merchant annual savings of $288.
Costs:$950 of $1152 are direct costs
The processor makes $200 per year.
The sales person makes a fraction of that.
What kind of service can a business expect from an account that makes them $200/yr?
More than likely, no one is going to help the merchant optimize processing, because it would take too much time for little return. The reason the cost is at 3% , 4% or higher for small businesses is because of the cost to maintain the account. Think about statement printing, postage, support etc. It’s a loser for the processor unless then tack on enough dollars to make it worth it.
Is $288 worth the effort for the merchant?
In the long run, maybe.
If the merchant expects growth, then a contract without an early termination clause is a must.