by Ty Hardison

Bank fees reduce impact of B2B payments

This time of year, merchants around the country are doing whatever they can to increase their profits. Retailers and B2C suppliers rely on the holiday shopping season to inflate revenue and B2B vendors are frantically trying to improve their bottom line before the end of the year.

As a result, several companies are looking for ways to cut operational costs across the board. Credit card processing, as previously mentioned in this blog, is a component of businesses that many decision makers believe is costing too much money.

The fallout of the lawsuit against Visa and Mastercard is still being worked out, and while there is strong hope that the ultimate results will weigh heavily in the merchant's favor, a number of vendors are voicing their displeasure over high processing fees and directing most of their disdain toward banks.

Ted Burke, a merchant in Capitola, California, wrote a guest post in The San Francisco chronicle voicing his dissatisfaction over the way banks are taking advantage of merchants.

"Moreover, banks are double-dipping - they are already protected from inflation because credit swipe fees are assessed as a percentage of each sale. This, when menu prices go up, so does bank revenue. Yet the banks keep raising the percentage rate to take a bigger bit, making transactions more expensive," Burke writes. "I view the banks and credit-card companies as unwanted business partners. They do not work anywhere near as hard as I do, yet they collect nearly as much in fees as the average restaurant earns in profit."

Burke, a restaurant owner, shares the same plight as business suppliers across the nation. It's hard for companies in any industry to turn a significant profit if they are constantly bombarded by processing fees. That's why accepting payments containing level 3 data is a worthwhile practice. It reduces processing fees and helps vendors increase their profits.


by Ty Hardison

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