Did Back to School Retailers Get Fee’d?
Back-to-school shopping has become big business for retailers. According to a new study by Deloitte, total back-to-school spending was expected to hit $27.8 billion, or $519 per student this year — up only slightly from the $27.6 billion, or $510 per student, anticipated the same time last year.
Many back-to-school shoppers are indeed looking for the best deals and retailers want to offer them to consumers to encourage them to shop – and spend – with them. However, sometimes it’s difficult for retailers to drop prices any lower because the costs they incur to process payments are already cutting into their margins, which in some cases are already small. Many fees are first paid by the payment processor to the cardholder’s issuing bank and card company (Mastercard or Visa), and later charged back to the merchant by the payment processor. The variable nature of these fees, called “interchange fees”, depends upon the card type, information contained in the transaction, when it was processed, and how it was processed (swiped or manually keyed in). The interchange fee is different for every credit card transaction because of the many factors involved. But the issue is that retailers are paying it, and therefore, they’re not getting all the benefits of back-to-school spending from consumers.
At Payway, our goal is to reduce payment processing fees, and to let retailers keep more of what they make—especially in the busy times like back-to-school and the holiday season. It continues to bother us how many well-known payment processors take advantage of merchants by overcharging for transactions or bundling together as many fees as they can.
If you are a retailer, do you know how much of your profit actually went to fees versus your bottom line?
The customers we work with know what to predict for their transaction costs because we provide absolute transparency with our cost-plus pricing model, also called interchange-plus pricing.
We’re happy to show you how Payway is the most cost-effective payment service provider and if you are a retailer, how you could be putting more money in your pocket instead of your payment processing partner’s wallet. Right out of the gate, we run the numbers and compare your existing costs for payment services to what those costs may be with Payway.
It turns out we’re almost always able to reduce the monthly base fee, transaction fees, and interchange rates, among others.
So, if you think you spent way too much on transaction fees this back-to-school season, talk to Payway and let us see if we can prevent that from happening to you during the next big spending season.