Massive changes are coming to the world of merchant services, and the Merchant Advocate Program from Echo Daily is leading the way. Credit card brands and the banks have been very successful at extracting interchange fees from merchants and ultimately consumers.
Thankfully, that balance of power is shifting. The largest retailers are using their muscle to fight back, and recent court decisions are creating fresh options for small and medium-sized merchants.
If you own a small retail store, restaurant, or service business, low sales costs and cash customers are your lifeblood. A MAP program and payment processing solution from Echo Daily can help you give your customers the best experience and competitive prices. As your payment processing partner and advocate, Echo Daily’s mission is to make the changes work to your advantage.
High credit card processing costs hurt small businesses and large alike. Some of the largest corporate retailers have been fighting back aggressively against high fees. Multi-national retailers like Wal-Mart and Amazon have been making efforts to reduce processing costs by hundreds of millions of dollars.
In one of the latest skirmishes in this backlash involves Kroger. The supermarket group recently implemented a limited ban against Visa credit cards at the stores of one of its subsidiary brands. The business model for grocery stores involves generating an immense volume of consumer sales transactions with low margins. The interchange fees per grocery store transaction add up quickly and stand out on profit and loss statements, which gets attention in the boardroom.
Companies have been pushing back against card fees since plastic first emerged. In the western United States, ARCO gas stations have consistently maintained the lowest gas prices by dealing in cash. Gas stations have notoriously low profit margins. So the interchange rates set by card issuers and transaction fees associated with merchant services hit the sector hard.
In the mid-eighties, ARCO made the bold decision to drop the credit card payment option at its service stations. The result has been lower cost for cash customers at the pump and in its AM-PM convenience stores. The solution may have lost a few customers for the company in the short term, but it seems to have come out ahead.
The battle over interchange fees charged by the card brands has been going on in the law courts for years. One recent decision in a class action lawsuit against Visa, MasterCard, and the banks that issue credit cards means that as a merchant, you no longer have to build interchange fees into your prices.
This is good news for independent retail stores, restaurants, and service providers. If you operate a small business that depends on high volumes of small transactions and cash payments, you know how interchange fees eat away at your profitability.
In a competitive business environment, you can’t afford to have the cost of credit card processing be one of your largest monthly expenses. Fortunately, help is available, and you can still take credit cards for customers who want to use them.
Because of this court decision, and the Merchant Advocate Program, you can treat your cash customers more fairly and engage with all of your patrons more transparently.
Echo Daily does more than manage payments. We are the agent of change with advocacy solutions for integrating payment processing, Point-of-Sale equipment, and loyalty programs. When you partner with Echo Daily for payment processing, you step away from the battles and boycotts to focus on taking care of your business and customers.
With MAP, you’ll offer cash discounts without boycotting card companies. Also, you’ll learn how to educate your customers that adding a surcharge for credit card payments is fairer than hiding the cost within the sale price.
Compliance with processing standards and rules is still something that small businesses have to navigate carefully. The MAP program means you don’t have to do it alone. Echo Daily will be your advocate to help you stay compliant and keep your transaction costs to a minimum.
The actions of ARCO and Kroger amount to fighting unfairness with boycotts. It’s one thing for national and multinational corporations to limit the cards they accept in stores. As a small, local business or independent professional, it’s harder to muster the leverage to go against merchant services providers on your own.
With the MAP program, you’ll help your cash customers by eliminating fees that don’t benefit them. Additionally, you’ll educate your customers about their payment options and the real cost of credit card payments.
Echo Daily can help you ride the wave of change in payment processing. If you’re feeling the burden of narrow margins and expensive payment processing, contact us and schedule a free consultation today.