From banking fees, to overheads, to business account charges and more – at the end of the day they really do all add up. A company that reduces business transaction fees as much as possible has more money to invest in itself, in its employees and product. By reducing expenses, you’re prioritizing cash flow: the lifeline of a business (so pretty important!). We’ve put together five ways you can save money on those all-important business transactions.
One of the biggest problems with brick-and-mortar stores or accepting payments in-person is the large amount of transaction and general costs that come with managing a physical shop. By going online your business saves on a lot of expenses: rent, utilities, staff, and more. With an online payment system, you still get to reach customers (or even more!) with much lower overheads. How? Every aspect of the checkout is automatic and digital, which means you save a large chunk of money by getting rid of card terminals and payment software – and forget about cheques!
Many businesses hesitate going online because of the high upfront costs of accepting card payments and using card terminals. The good news is that there are now alternatives that don’t charge you an arm and a leg to do business.
Many companies won’t tell you that card machines can be expensive. Many card machine terminals are not price transparent, with a lot of fine print and conditions that “depend” on certain factors. With card machines, you’ll need to keep into account a setup free, a delivery fee, a monthly rental fee, transaction fees, reporting fees, chargebacks, monthly minimum charges, terminal servicing fee and more! This means that card machines are generally more risky, especially for small businesses who want to keep expenses as low as possible. With the many alternatives to card machines nowadays, getting a card machine can be genuinely harmful for your business. That’s why we believe the best option is using an app that allows you to accept payments with just a mobile phone.
If you’re accepting digital payments, it’s likely you accept credit cards as well. However, it is true that accepting card payments can be expensive, and it may be worth looking at alternative options. Consider talking to your current payment processor and trying to negotiate lower rates (this works well if your sales volume has increased). You can also look into switching to a cheaper credit card processor; make sure to look into chargeback fees, dispute fees, terminal rental fees and general maintenance fees. If those options don’t fit with your business, consider setting a minimum payment for credit card transactions, so you don’t end up with a loss. If that’s too much of a hassle, look into accepting payments with your mobile phone. With Pomelo Pay, credit cards, debit cards are all accepted with the same processing fee of 1.75% (and there’s no setup fee!).
Although current accounts are usually free, most major banks charge a fee for business banking, with high monthly fees, transaction fees and more. Now with the arrival of challenger banks, doing business through a business account doesn’t have to cost your business anything at all.
If you’re doing business internationally, companies such as Transferwise offer a multi-currency account which lets businesses send and receive money in over 40 currencies without exorbitant fees. The multi-currency account means you can receive in AUD, GBP, EUR and USD all for free, with payments made with the real exchange rate. Other modern banks that offer free business bank accounts are Starling Bank, Tide and Coconut. On top of free banking, a good business bank account may offer an overdraft, debit cards, online banking, accounting software integration and interest all in one!
Accepting cash, using card terminals, using specialty POS devices – these are all activities that increase the cost of doing business.
For this reason, there is a big market for hands-off mobile payments. No more mobile terminals or unnecessary fees – turn your mobile phone or any mobile device into a Point of Service with just an app. All your customer needs to do is scan your Paycode (a kind of QR) with their phone, select the product and pay instantly.
From your side, it’s just as simple: set up a menu of products and services on your dashboard, get purchase notifications in real time and receive the money in your account that same day. Thanks to Pomelo Pay’s flat fee of 1.49%, you can forget about upfront costs, maintenance costs and transaction fees. Setup can be done from the comfort of your sofa in a couple of minutes. Oh, and it comes with a free dashboard, analytics and the ability to integrate with those much needed e-commerce tools.
Keeping business transactions cheap are key to increasing revenue, lowering expenses and in some cases, improving customer experience. This kind of optimisation means you get to invest more resources in your team, your product and your customers. Liked these five tips on saving money on business transactions? Feel free to share!