Running your business efficiently may mean using multiple providers to satisfy all your needs. This could include client or inventory-management software, an e-commerce hosting platform and a Merchant Account Provider to process in-person and online payments.
Integrations between merchants and software providers make reporting and access a breeze, but what about the cost? An ideal integration should eliminate fees, not tack on more. Unfortunately, not all software providers play fair.
In installment 17 of this series, we expose how some software providers force you into expensive, Flat Rate pricing plans to profit off your processing volume or penalize you for using other integrated providers.
As customer experience becomes more important, software companies are adopting an omnichannel business model. In an effort to move toward this approach, many software companies now offer their own services to process credit card transactions.
While this seems more streamlined, it actually comes with expensive processing rates. That’s because becoming a true Merchant Account Provider takes time. To bypass the wait, some software providers resell the payment services provided by Payment Facilitators.
So what’s the catch?
Payment Facilitators cannot offer premium pricing, so you’re faced with costly Flat Rate pricing if you use a software provider’s payment service. Flat Rate pricing is not ideal for larger businesses with high monthly processing volume.
To lock you in with a partnered Payment Facilitator, these software providers penalize customers for using more affordable alternatives by tacking on a 2% markup.
Either way, you’re paying more than you should while your software provider makes a pretty penny off your sales. This practice hinders your ability to make the best decisions for your business, and the costs are tangible.
You can still fulfill all your business needs, work with fewer softwares programs and providers, and get fair billing. Before you commit to working with any service provider, learn about all possible pricing models. If your business requires software to manage customers or inventory, research all integrated providers in depth and seek out free, seamless integrations with Merchant Account Providers that offer fair billing.
Does your business require multiple service providers? Do you pay an additional fee to your software provider for using an external Merchant Account Provider to process payments? Tell us about your current setup in the comments section below.