A robust payment processing system is the backbone of a growing business. Well-implemented systems help business owners collect customer fees and seamlessly process vendor payments. Entrepreneurs that bootstrap their business (work without additional external funding) depend on timely fee collections from customers to keep their business running. Moreover, large corporations without secure and scalable payment processing technologies risk losing millions of dollars if their systems, even if systems go offline for a few minutes.
Business owners that go the extra mile while setting up their payment processing systems prevent the risk of system downtime and attract a larger customer base. They also offer a seamless shopping and checkout experience with reliable payment technologies. In this list, we will look at ten realistic payment costs of starting and successfully running a business so that you can initiate your payments journey on the right foot.
Setup Costs for Payment Processing
- Merchant Account Setup Consultation
- Payment Technology Setup Fees
- Maintenance Fee for Hosted Services
- Credit Card Processing Fees
- ACH Fees
- Wire Transfer Fees
- Remittance Costs
- Payroll Processing Costs
- Accounting and Reconciliation Technology Costs
- Cybersecurity and Testing Fees
Setup Costs for Payment Processing
Merchant Account Setup Consultation
Merchants, especially new small business owners, should ideally consult payment processors who can help them set up a business bank account correctly. While the process is straightforward, it often requires a lot of thorough paperwork and documentation. Reliable payment processors often help new business owners set up new merchant accounts and basic complementary payment portals/technologies. You can use our 4-part mini-blog for entrepreneurs to get started.
Payment Technology Setup Fees
A business owner might need one or more payment solutions depending on the type of business. Ideally, business owners should leverage a combination of solutions to target a large market. Companies that want to scale online must adopt technologies like hosted payment portals and virtual terminals. They should also look into technologies that offer ACH and card processing on a single platform. Think you need a card machine to accept payments? Very few modern businesses do need such devices. Check out this blog to see if you need a card machine.
Operational Costs
Maintenance Fee for Hosted Services
Most modern-day organizations rely on hosted payment services for their payment and collection operations. Some benefits of a hosted payment portal include:
- Low setup costs: Outsourcing the core payment functions to a reliable hosted payment portal provider releases the organization from the responsibility of purchasing costly servers and website hosting services.
- Small maintenance fee: Hosted service providers charge a small monthly/annual convenience fee and offer unparalleled peace of mind.
- Excellent support: Top hosted payment portal service/technology providers also offer relevant support to ensure a near-perfect uptime.
- Scalability with complementary technologies: Tech-savvy payment processors offer various complementary solutions like SMS payments, Email Invoicing, and IVR payments to scale the payment acceptance as the business grows.
- Easier compliance: PCI-compliant payment processors reduce the PCI scope and develop custom hosted payment portals and iFrame technologies to ensure that you don’t need to deal with sensitive customer information on your systems.
Learn more about the benefits of hosted payment technologies.
Credit Card Processing Fees
Our previous blog listed 24 FAQs on credit card processing fees. Some of the top credit card convenience fees include:
- Markup fees
- Interchange rates/fees
- Assessment fees
- Card surcharges
- Swipe fees
Learn more about the different types of convenience fees that business owners pay when they accept credit cards. It is important to note that these charges vary depending on the type of card, even with the same card issuer.
ACH Fees
ACH is one of the cheapest ways to transfer money online. It is convenient, fast, and offers several automation benefits. Most modern business owners rely on ACH and eChecks instead of paper checks to carry out online transactions safely without spending a hefty amount in credit card fees. Learn more about the benefits of ACH applications.
Wire Transfer Fees
Organizations that regularly deal with global vendors often pay hefty wire transfer fees with each transaction. Ideally, they should batch their transactions into larger amounts to avoid paying a big flat fee for each transfer. Our previous blog compared the differences between ACH and wire transfer. Certain financial institutions also offer International ACH transfers. Discover the differences between International ACH transactions and International ACH transfers.
Remittance Costs
Organizations that deal with global customers and collect payments in a foreign currency must also consider remittance costs while assessing their payment needs. Depending on the country they are dealing with, they might have to pay additional remittance charges on every transaction.
Payroll Processing Costs
Most medium and large organizations rely on third-party payroll processing companies to pay their employees on time. These payroll processors charge a small monthly/annual fee to automate their payroll processes. Some organizations rely on payment processors directly to set up an easy recurring payroll processing technology to save these costs. Such technologies help the organization process payroll automatically with a one-time quick setup for every new employee.
Maintenance Costs
Accounting and Reconciliation Technology Costs
Most organizations, even one-person business owners, need to streamline their accounting operations for tax-filing and reconciliation processes. Large organizations often have large teams that handle their accounting processes or outsource these operations to a third-party agency. If an organization decides to hire accountants and complete their reconciliation processes in-house, they need tools like QuickBooks or Xero to digitize their account payables and receivables. Such organizations need a payment processor with open developer plugins and APIs that can connect with their back-office accounting tools to sync their data seamlessly.
Cybersecurity and Testing Fees
Organizations must also implement additional security systems to protect the payment solutions/gateways from threats. Some of the top security systems that organizations use to protect their payment processing units include check verification, account validation, encryption, and tokenization. You can use our guide to select the right secure payment systems for your business.
A One-Stop Transparent Fee Model
We have discussed the significant costs of payment processing for businesses. Businesses often overlook these payment costs for other larger debit card convenience fees, time costs, office space rent, and small business administration costs. However, a well-defined business plan helps the merchant identify these small costs before they pile up.
Ideally, merchants should go for payment processors that offer a fully transparent pricing model for processing costs. Discrepancies in the quotes or hidden “convenience fees” can quickly amount to high unforeseen business startup costs. These are red flags that a merchant should strive to avoid. Learn more about reliable and transparent payment processing technologies today. Set up a call with our relationship managers to discover powerful, innovative payment solutions for your business.