FEATURE Credit Card Processing Fees
WHAT BANKING EXECUTIVES AND OTHER BANKING PROFESSIONALS NEED TO KNOW Mike Higgins, Partner, MSP Consulting, LLC
Credit cards are an increasingly ubiquitous means of making pay- ments. Today, credit card acceptance has passed beyond the simple consumer purchase at a retail store or restaurant. In fact, credit card use has permeated almost every industry with an estimated 30 million businesses accepting credit cards worldwide. For a community banking executive, the trend toward growing
credit card acceptance represents an opportunity. With a working understanding of the mechanisms of the credit card processing industry, a community bank can compete and even surpass regional and national competitors.
An Overlooked Service Offering
At many community banks, merchant services are often an after- thought; a commodity service. With this mindset, banks are not only missing an opportunity for additional fee income, but just as im- portantly, they are missing an opportunity to increase their value and expand their relationship with their commercial customers. For businesses, credit card acceptance is increasingly important
to their accounts receivable. However, experience tells us that many community banks service less than 20 percent of their business customers who accept credit card payments. When a community bank does help a business with their merchant services, typically it is a referral to a third-party sales group whose primary objective is to sell the solution—not to consult the business and provide ongoing service and support. This approach often leads to inflated fees and a solution that is not tailored to the business’ needs with a punitive contract. None of this is in the best interest of the com- munity bank, leaving the bank open to reputational risk associated with the “recommended” solution.
Know What Your Commercial Customers are Experiencing
With the increase of credit card acceptance across every industry, the fees associated with accepting card payments have become a significant business expense. With this increased impact to the business’ bottom-line, the marketplace has also become more complex with ever-expanding regulations, increasing security compliance requirements, and new payment technologies. Common challenges and complaints from businesses about their merchant processing include:
Businesses are looking for guidance and advice to help them decrease costs, mitigate risks, make the most of new technologies, and streamline payment acceptance. Who is better positioned to fill this need than their community bank?
A Value-Added Approach to Merchant Services
Community banks are uniquely positioned to offer their business customers value-added solutions and services in the area of merchant processing. There is no need for a large investment or dedication of resources to increase fee income and build even deeper relationships with their customers. Community banks need to ensure they offer customized solutions to optimize the accep- tance needs at each business, helping their customer manage their bottom line. In addition, it is important that pricing and contracts are transparent and clearly disclosed, so customers know their best interests are being represented. Ensuring these attributes are provided in their merchant processing services, community banks will have a differentiated offering in the market, allowing more wins against regional and even national competitors, while increasing overall customer satisfaction. For additional information, contact one of us (Mike Higgins,
Patrick O’Boyle or Steven Beene) at 855-890-4900 or send us an email to email@example.com
MSP Consulting is an experienced advisor specializing in delivering high-performance merchant services for community banks. By partnering with MSP Consulting to offer the most cost-effective, service-driven solution in the market today, a bank’s merchant payment services can become a compelling, competitive offering like never before. Leveraging MSP Advantage, our unique proprietary solution, banks can improve fee income and increase the value of their merchant payment services offering while helping their commercial customers better manage their payment solutions.
6 MIDWES MIDWEST INDEPENDE INDEPENDENT BANK BANK M B NC.c MIBI ANC.com
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