Small businesses have faced a series of economic challenges over the past few years, from the pandemic to inflation and supply chain issues, making profitability a constant struggle. Even though it’s uncertain if a recession is on the horizon, small business owners need to be proactive to boost their profits.
Luckily, there are ways to save money without a lot of hassle. One area to explore is credit card processing and payment systems. By reviewing tech setups and cutting down on high credit card processing fees, business owners can feel more secure in their profitability and success regardless of the economic climate. Here are some specific strategies:
Look at the Value of Your Tech Setup
Our lives, both personal and professional, have become subscription-heavy. Whether it’s for personal use like gym memberships and phone bills, or business needs, many subscriptions go unused or are overpriced for how little we actually use them. This is especially true for business subscriptions, which have grown with the SaaS market. Companies love the steady revenue these models bring, although buying services outright might be more cost-effective in the long run.
For small business owners, it’s important to evaluate how much you’re spending on these services and whether they’re worth it. If the costs outweigh the benefits, consider cutting them or moving away from subscription models to save money in the long run. This is particularly important during economic uncertainty, and many small business owners are now carefully assessing their software costs with an eye on long-term savings. Taking a close look at your tech can contribute to business success moving forward.
Understand Credit Card Processing
Understanding the credit card processing industry is another way to reduce costs. It’s a complicated field, and not knowing the ins and outs can negatively affect your bottom line. Start by understanding surcharging programs, which are meant to help businesses recover credit card payment costs. These programs are legal in most states when done right, but incorrect usage can lead to problems. For example, it’s illegal to add a surcharge to a debit card, so businesses need clear processes to differentiate between card types.
Furthermore, some states have laws limiting surcharges passed on to consumers. New York, for instance, requires clear disclosure of higher prices for credit card payments. Meanwhile, states like Massachusetts and Connecticut have banned surcharges entirely. There’s also the upcoming Credit Card Competition Act, intended to help merchants save on fees, though its impacts remain uncertain. Small businesses shouldn’t rely solely on legislative changes to solve their issues.
Immediately, it’s beneficial to understand which fees are negotiable or removable. Whether through self-education or hiring an expert, small business owners should learn to identify negotiable rates and fees. Knowing how to read merchant statements can also help avoid unnecessary fees, like non-compliance charges for not following PCI requirements.
By assessing the return on technology investments and getting a better grasp of credit card processing complexities, small business owners can better navigate a challenging economic landscape. These steps can greatly enhance the focus on what truly matters: delivering excellent customer service and driving profitability.
