Credit Card Companies make money in a variety of ways. Here are the four most common:
One: The most common way credit card companies make money is through fees, such as the annual fee, overlimit fee and past due fees.
Two: Another way credit card companies make money is through interest on revolving loans if the card balance is not paid in full each month.
Three: As explained above, the card issuer (the bank that issued the card and/or the issuer network, be it Visa, MasterCard, Discover) makes a percentage of each item you purchase from a merchant who accepts your credit card. The rates range from 1% to 6% for each purchase.
Four: The card issuer can also make money through ancillary avenues, such as selling your name to a mailing list or selling advertisements along with your monthly billing statement.
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Small businesses have to make a decision about to whom they are going to extend credit. Are they going to extend credit only to those who pay in cash and checks? This may make their payment processing easy, but it will severely limit their customer base. If they choose to extend credit to their customers, it is a little more complicated, but it will expand their reach into the marketplace and the customer base. Most small businesses eventually make the transition to offering credit card (and debit card) processing services.
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Why choose Brad Franzen for your merchant services?
Brad Franzen acknowledges that the world is moving further away from paper and is going towards mobile and electronic. Businesses that are keen on maintaining the traditional cash-only policies will not only fall behind their competition, but will also fail to meet their customers’ expectations. By choosing Brad Franzen for your credit card processing provider, you have the guarantee that:
You will get an user-friendly card payment processing solution
Our systems meet the highest standards for payment security
Our solutions are PCI SSD compliant and protect customer sensitive data
You can reduce labor costs and time thanks to our integrated payment with accounting solutions
You will have a simple and efficient tool to help you with business resource planning
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- No cancellation fees: Brad Franzen says that owners should never sign a merchant account contract that charges cancellation fees. Without these fees, business owners can cancel their accounts and go with a lower service provider without having to pay a hefty cost to do so.
- Remember to choose a secure merchant services provider that offers a PCI compliant payment gateway, along with integrated payment services to optimize your processing solutions. Also, ensure that your processor offers flat rate pricing and in-house customer support.