Quick-Serves Look to Cut Spending
A challenging economy means that quick-serves are looking to economize and cut unnecessary spending. While operators cannot completely remove the fees associated with credit and debit card transactions, shrewd operators will examine this aspect of their operating costs and do what they can to reduce such fees. Todd Giblette, vice president of business development for credit card processing software provider, Merchant Warehouse says, “The lion share of what operators have to pay in their fees is interchange fees. That’s the fee that’s expressed as a percentage and a per-item fee set by Visa and MasterCard through a number of different factors.”
The fees charged by the credit card company to an operator vary depending on the risk level posed to the system by the transaction. For instance, if a cashier is keying in the number manually it is considered to be a higher risk transaction that if a customer swipes the card himself. As there are more than 250 ways to complete a transaction, interchange fees are often challenging to calculate.
Giblette urges operators to educate themselves about the various interchange fees collected by the processors, especially in respect of the type of transactions processed in their business, to increase their understanding. “Processors typically try to keep merchants in the dark about how to best qualify their interchange,” Giblette says. For example, processors may piggyback charges of their own on specific types of purchases. Merchant Warehouse’s interchange management system, BINSmart, aids operators in keeping fees lower by prompting customers based on transaction type and running the purchase at the cheapest rate-instead of imputing a blanket percentage for all transactions.
To reduce processing fees, Ian Drysdale, senior vice president for the processing company, RBS WorldPay, suggests operators get rid of the extra phone line used for their fax machine and card terminal. “Since your processor will not have to pay for the dial cost, the transaction fee is often far less,” Drysdale says. “You can then process via DSL or broadband via cable or satellite on your main line.” Drysdale also suggests that operators should shop around for processors who offer quick processing times and low costs. “The most up-to-date processors can accept transactions past midnight on Monday-even Pacific time-and have the money in the operator’s account, earning interest and paying bills, on Tuesday.”
