Are consumers spending at your business?

Even with consumer fears looking at inflation and recession, consumer spending remains strong! 

The Federal Reserve Bank of New York, which regularly collects data on consumer economic sentiment, reported an increase in short-term inflation expectations on the part of consumers, but a decline in medium- and longer-term expectations. According to the Mastercard SpendingPulse, which measures in-store and online retail sales across all forms of payment, U.S. consumer retail spending, excluding automotive, rose 9.5 percent year-over-year in June; excluding auto and gas spending it was up 6.1 percent year-over-year. (http://www.greensheet.com/emagazine.php)

Want my money...earn it! 

These are some of the trends MasterCard found in several consumer surveys: 

• Consumer spending represents about two-thirds of the U.S. economy, according to the Fed.

• 51 percent of workers are short on money before they get to payday. The last time the survey was run, in 2018, it was 24 percent. 

• This is not just happening with lower income consumers. Over a third of workers reporting household incomes in excess of $250,000 have found themselves in that position this year, the research center said.

So what can your business do to lessen the fear of spending with consumers? 

• Create worthwhile promotions that brings them back

• Offer unique or rare products and services that makes you the ONLY place they want to come to purchase! 

• Offer rewards and loyalty programs to keep them coming back to your business! 

• Continue to offer your products and services via online website!

• Offer delivery services or drop to car pick-up

Each business today is already complaining about supply chain issues, inflation and outrages gas prices effecting their "bottomline"! But you can change that by understanding how to recapture your market and bring in happy customers! 

We have some local restaurants in the south Florida area that promote via FaceBook everyweek and bring in lots of new customers by offering nice promotions! They offer a coupon for the next time they come in along with a take-home menu for them to order online or by phone for takeout or delivery! 

Find a way to connect to your customers; they still want STUFF! They are just less apt to spend if you offer NOTHING! 

Want to save money on your merchant processing fees? Call us today! 

Merchant Processing Solutions Inc.
954-938-2420

Understanding Your Rates! We can help!

 All brands of credit cards charge different fees. Within each brand, such as Visa, MasterCard, Discover, and American Express, there are card levels such as debit/credit cards/high-end rewards/business/corporate/shopping cards. Each of these is set at different rates depending on the bank issuing the cards and the brand they use. 

WHAT ARE INTERCHANGE FEES?

When a customer pays with a debit or credit card, the bank that issued the credit card gets a portion of the transaction. This is called an interchange fee (or "wholesale" processing fee). It is intended to cover banks' operating costs and the risk of fraud. But they do not approve or finance that transaction. A business processing company does that service. They will add a fee in addition to the interchange fee to cover their processing fees, funding, and potential fraud risk. 

Formula: Interchange Fee (Wholesale Cost) + Merchant Processor Fee = Your monthly business service fees.

 AVERAGE EXCHANGE RATES

The typical interchange rate is 1.7% - 2% for credit cards and 0.5% for debit cards.

Here are the average credit card processing fees for the top 4 credit card networks:

Visa: 1.4% - 2.5%

Mastercard: 1.5% - 2.6%

Discover: 1.55% - 2.5%

American Express: 2.3% - 3.5%

Below, are the most common interchange fees you can find for each card association, starting in April 2022. 

Note: Credit card networks typically update their interchange fees twice a year, in April and October.

HOW IS YOUR RATE DETERMINED? WHICH METHOD IS THE BEST! 

Flat Rate: There are companies that offer a flat rate for qualified/medium/unqualified cards. They usually range from 1.75% to 3.75%. The problem with these types of processors is that they group ALL CARDS in that category and charge more for debit than it should be, more for credit cards, and more if it is in personal or by phone or internet. Most merchants end up paying much higher than if they had used the Interchange Plus Pricing Method. 

Interchange Pricing Plus combines the EXACT price given by the Brands; Visa/MasterCard/American Express/Discover and the processor add a FLAT FEE at the top for your part of the processing that includes device connections to the networks to process transactions, customer credit card transaction approvals, and funds to your bank account. You can't just use the BRANDS to process, you need a merchant processing company to help you combine the approval network with your bank account! 

Diner's Club, Carte Blanc & JBC are cards we rarely see in the United States. Those cards, if taken, are paid through a check to your business at the end of the month. They are about 3% on each transaction. 

I hope this explain has helped business understand why Merchant Processing Solutions offers a better pricing method, by offering Interchange Plus Pricing instead of a flat rate method. You save money and ALWAYS know what we are charging! 

If you would like to know more about your rates, call us for a free analysis! 

Merchant Processing Solutions Inc.
954-935-2420