SAN DIEGO—The Association for Financial Professionals and Aite Group released a new Payments Decision Guide at NACHA PAYMENTS 2013 Monday, presenting retail treasurers with strategies for managing payment acceptance costs and negotiating with merchant acquirers. The guide also provides details on the impact of industry mandates and legislative and court challenges to interchange fees and pricing.
The retail industry continues to face a slew of changes, from the Durbin Amendment, to the $7.25 billion interchange settlement, to EMV adoption. The new guide helps retail treasurers better understand the impact that these changes will have on them and their acquirers.
Managing merchant acquirer relationships
Many merchants do not fully understand the components of their payment acceptance costs, which can lead to heated discussions with their acquirers. The new Payments Decision Guide presents some best practices to help merchants manage acquirer relationships more efficiently.
- Make sure you have the right acquirer. There are discount acquirers and there are premium ones—decide which one is appropriate for your needs.
- Understand the component parts of your payment acceptance costs. Understanding the key drivers of your costs will help you better manage your cost-reduction efforts.
- Comparison-shop regularly. The merchant acquiring market is competitive—over time, prices tend to come down.
- Strive for mutual agreements as much as possible. It is prudent to ask for an out clause with 30 days notice for normal business operations. But consider the cost of switching providers before terminating an agreement.
- Partner with your acquirer to reduce expenses. Since about 75 percent of the money you pay your acquirer goes to card issuers, your acquirer can will likely work with you on reducing these expenses.
- Maintain frequent contact with your acquirer. Being out of the loop on changes to payment acceptance rules could cost you. Your acquirer is always on top of these changes, so check in frequently.
- Ask your acquirer pertinent questions. What is the chargeback review process? What are my major settlement categories? Will I qualify for the lowest interchange rate?
Following these rules should help you maintain a comfortable and mutually profitable relationship with your acquirer.
Download the AFP Payments Decision Guide here.