The Top 5 Credit Card Processing Problems and Solutions for Associations
Each year, we at U.S. Transactions Corp. speak with well over 100 Associations across the U.S. with respect to their credit card processing services. Out of countless discussions and observations, we have discovered the problems and solutions boil down to 5 major issues that make about 80% of the difference for Associations when it comes to credit card processing. These 5 “Problems” arise in virtually every Association we come across. Instead of keeping the solutions a secret to ourselves or to those Associations who happened to have met with us, we thought it would be worthwhile to make the recommendations available for everyone’s benefit.
Here are the 5 most commonly occurring credit card processing problems faced by Associations today, and what can done to easily solve these problems.
- Associations are paying too much in credit card processing fees. This is the 800-pound gorilla in the room for sure. Associations, like any business, would like to see more of their hard earned dollars stay in their business to fulfil their mission than to have it siphoned off from the business as fees. Refusing to accept credit cards is not an option since you need to provide your Members an easy solution for paying dues, registration, and sponsorships. There are two things you can do immediately: 1) approach your bank or merchant service provider and ask them to remove surcharges associated with accepting commercial card transactions. This represents a large portion of your overall fees. 2) ask them to reduce your processor service fees. These should typically not exceed ½ of 1%, and it is typically a function of the Association’s annual credit card sales volume. Overall your total effective rate, including AMEX acceptance, should not exceed 3%.
- Associations are using membership management software which forces the Association to use the “captive” merchant service processor of the management software company. This is generally not consistent with fair trade practices since merchant services is a competitive and open field. Using a captive merchant service provider that is associated with any proprietary software will undoubtedly result in Associations paying higher fees than what they would otherwise pay if all market options were available. Consider the additional cost as part of your decision to use the membership management software you have chosen.
- Spending too much administrative staff time processing payments? The most advanced credit card processing virtual terminals have many features which can eliminate a lot of administrative staff time in accounting to process credit card payments. Going into full details of all of these features is beyond the scope of this article, but for completeness, we will mention them by name: e.g., Batch Upload functions, Customer/Card profile save and retrieve, Multiple Transaction processing, Recurring Payment feature, 24/7 online payment solutions, etc.
- Associations stuck in the 20th century using old fashioned credit card terminals. As an Association you are not a retail storefront, restaurant or laundromat. Why are you using a credit card machine? These are expensive solutions; sales agent love to sell the equipment for $600+ for a hefty commission. In its day to day operations, Associations don’t have members coming to the office to have their credit card swiped for payment. A virtual terminal is a superior solution and costs less than a physical terminal. Even at trade shows or conferences, you can attach a “wedge” device with a USB cable connection to swipe and capture card information at the registration desk and it will populate directly into your virtual terminal through your laptop which you likely are bringing to the conference anyway, or through a mobile app on your smartphone(s).
- Associations ask how they can minimize their risk of being a victim of stolen credit card data. In spite of all the headline news about massive card breaches, the primary reason that companies like Associations experience a fraud involving credit card data is from employee misuse or theft. Manually processing credit card payments by your administrative staff, and therefore directly handling your members credit card data puts you more at risk. The latest credit card processing software can help you easily set up a 24/7 online webpage for payment. Your members can pay for dues, registration, sponsorship or other services and products online. They can also pay any outstanding balances on account or unpaid invoices online. By implementing this innovative solution your customers and members will enter their credit card information themselves at any time of day (24/7/365). The credit card data is captured by the payment processing software so that the Association and its employees are never privy to the full credit card data. Only the first 6 and last 4 digits of the card number are exposed to the Association and the card number is not stored on the Association’s server environment, so in no case would the Association be responsible for the theft of the credit card data.
Author: Wade Tetsuka is a CPA and resides in Leesburg, Virginia.
U.S. Transactions Corporation
44044 Riverpoint Drive,
Leesburg, VA 20176
Phone: (866) 442-3327
Fax: (866) 511-0935
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