Paragon research indicates that merchant acquiring costs are among the highest costs for merchants, in some cases exceeded only by personnel costs! Obviously, every merchant would like to reduce merchant acquiring fees. Some large, national merchants have staffs dedicated to tracking down every exception condition that raises interchange rates. Many merchants also have a policy of requesting pricing proposals from Merchant Acquirers on a scheduled basis, typically every few years. With consolidation in the merchant acquiring business resulting in larger and larger acquirers, scale economies can often result in price decreases. Many merchants, however, do not have the internal staff to continually monitor exceptions or manage the RFP and pricing process; they are too busy selling goods and services.
Paragon has worked with large and small merchants to reduce costs and improve profitability. Our work often includes reviewing current processes and systems to determine where efficiencies can be gained or costs reduced. Once internal operations, systems, and processes have been reviewed, specific goals and objectives are written that become the basis for requesting pricing proposals from Merchant Acquirers. This process may be formal and include an RFP, or it may be a simple Request for Information, RFI.
The following is a payments strategy developed in collaboration with a large multi-national retailer.
Merchant Payments Strategy endeavors to continually increase sales and profitability by implementing market driven payment products in the most cost effective, efficient manner possible. Merchant will achieve these objectives by collaborating with vendors that have a proven record of accomplishment:
- Aggressively managing performance, reducing costs, and creating opportunities for improvement
- Are at the forefront of developing new payment products
- Proactively assist Merchant to obtain the lowest possible interchange rates and fees from card associations and issuers
For more information about reducing merchant acquiring costs and increasing profitability please contact:
Paragon Data Services, LLC
16333 Trenton Road
Suite 600
Southgate, MI 48195
888-385-1259
313-791-0999 (fax)