Tags |
|
|
Links |
|
|
Write You - Reduce Payment Processing Costs by Converting Debit-Card Customers to Direct-Debit Payments
What a great title for an article on communication, don't you think? LoBo recorded this song in the 70s about hanging out and traveling around the country in a car, just going wherever and however the spirit moved.That pretty much sums up the free-flowing way most of us communicate. We stay with topics for as long as they interest us, and we move on when they don't. Communicating effectively can be one of your greatest assets when you're running a small business. Ineffective communication, conversely, can be your greatest liability.3 Main Styles of CommunicationThere are three main "voices" or styles of communication: one-under, one-up, and equal.1. One-under communication is a style that is typified by minimizing what you are saying, or putting yourself or your words "one-under" in importanc
How much can merchants save with Direct-Debit transactions?
Accepting direct-debit instead of debit-card transactions can generate significant savings for most transactions; with the rule of thumb being the larger the transaction amount the more the merchant saves. The following is a simple example using the PaySimple pricing structure:
Transaction Amount: $500
Cost to process via Debit Card (MOTO rate): $10.24 ($0.29 inquiry + 1.99% discount rate)
Cost to process via Direct-Debit: $0.55 flat
Total Savings per Transaction: $9.69
Total Monthly Savings (based on 250 transactions/month): $2,422.50
Are there drawbacks to Direct-Debit transactions?
The largest drawback for merchants accepting direct-debit payments is that unlike debit-card payments, you will not immediately know if there are sufficient funds in the customer’s account to cover the charge. With a direct-debit, you will get NSF notification in 24 hours (far better
Writing white papers is not an easy task for most companies, but every company needs them to effectively educate and market their products and services to potential customers. In many cases, white papers contain additional information and extra analyses, which aren’t included in other advertising or marketing materials. Your business can utilize white papers to reach a wider audience, but first you need to ask yourself these important questions:1-Who is your audience? Make sure you analyze and define your audience, so you can effectively convey your technical or business concepts to the reader. If needed, you can include an extra section of your paper called “Intended Audience” in the body of your white paper.2-Did you create an outline? It’s a good idea to structure your white paper according
This article will help merchants do this by comparing two very similar payment methods—debit card charges and bank account ACH direct-debits. It will explain how switching customers who pay with debit-cards to direct-debit transactions can significantly reduce merchant processing costs.
What is a Debit Card?
A debit card is a bank issued card that allows its user to access the funds in his account to pay for merchandise or services. A debit card acts like a credit card, and is often associated with a credit card brand such as VISA or MasterCard, with the difference being that funds are immediately deducted from the cardholders checking or savings accounts when a purchase is made.
What is Direct-Debit?
Direct debit is an easy way to deduct a payment directly from a customer’s bank account. It uses the premise of a paper check but takes it to the next level with electronic funds transfer. With direct debit, the need to write paper checks is completely eliminated. Your customer simply gives you permission to take funds directly out of his checking or savings account and transfer them to yours. Direct-debit is typically used for auto-recurring billing of regular transactions, such as a monthly rent payment, so that written permission to transfer funds is needed only once and customers no longer need to write checks every month. But, it can also be used with an Online Payment Gateway to enable your customers to purchase your products or pay their bills directly from a checking or savings account instead of with a credit card or debit card.
What are the differences between a Debit Card transaction and a Direct-Debit transaction?
Debit card transactions and direct debit transactions are at their core the same—each authorizes a transfer of money directly from the cardholder’s account to the merchant’s account. And, from the consumer’s standpoint they are exactly the same.
From the merchant’s standpoint however, they are very different. The transactions are processed through different networks, and the payment processing charges differ significantly.
Debit card transactions require the merchant to obtain a credit card merchant account and often to sign a long-term contract and pay a fee to open the account. Debit card transactions are processed through the same network as credit card transactions, and funds are deposited, less a commission (known as the “discount rate”), into a merchant account. The discount rate for debit-card purchases is typically lower than for credit card purchases (This is because the bank is taking less of a risk with a debit-card that deducts funds immediately from a bank account than with a credit card.), however there are some merchant processors that do not extend this discount to their clients. Typically, 2-3% of the transaction plus a 30 cent inquiry fee will be deducted from a debit-card payment and the balance will be deposited into the merchant’s account.
Direct-debit transactions use the Automated Clearing House (ACH) network to move funds from one bank account to another. Thus, you can use your regular business checking account for Direct-Debit transactions. You will need to sign a contract with a company authorized to manage these ACH transactions, but there is typically no long-term commitment. You will pay a fee for each direct-debit transaction you process—but it is typically a flat-fee that is not dependant upon the size of the transaction. (There are some companies that do charge a percentage based fee for direct-debit transactions—you should avoid these processors!). This fee is typically less than $1 per transaction.
How much can merchants save with Direct-Debit transactions?
Accepting direct-debit instead of debit-card transactions can generate significant savings for most transactions; with the rule of thumb being the larger the transaction amount the more the merchant saves. The following is a simple example using the PaySimple pricing structure:
Transaction Amount: $500
Cost to process via Debit Card (MOTO rate): $10.24 ($0.29 inquiry + 1.99% discount rate)
Cost to process via Direct-Debit: $0.55 flat
Total Savings per Transaction: $9.69
Total Monthly Savings (based on 250 transactions/month): $2,422.50
Are there drawbacks to Direct-Debit transactions?
The largest drawback for merchants accepting direct-debit payments is that unlike debit-card payments, you will not immediately know if there are sufficient funds in the customer’s account to cover the charge. With a direct-debit, you will get NSF notification in 24 hours (far better t
Making the transition from college student to full-time member of the workforce can be a difficult time for many graduates. Many graduates will accept responsibilities for their own lives and their own financial support for the very first time. A surprising number of graduates are advised of the challenges of finding a good job in the current job market. Many graduates are advised to simply apply for and accept any job that comes to their attention. Unfortunately, far too many new graduates are guided by this advice and settle for jobs in which they are undervalued and under-challenged.But, you don't have to settle. You can find a challenging job in which you will be valued and in which you can thrive. We offer the following top tips to new grads as they enter the job market.1. Know your skills, abilitie
What is Direct-Debit?
Direct debit is an easy way to deduct a payment directly from a customer’s bank account. It uses the premise of a paper check but takes it to the next level with electronic funds transfer. With direct debit, the need to write paper checks is completely eliminated. Your customer simply gives you permission to take funds directly out of his checking or savings account and transfer them to yours. Direct-debit is typically used for auto-recurring billing of regular transactions, such as a monthly rent payment, so that written permission to transfer funds is needed only once and customers no longer need to write checks every month. But, it can also be used with an Online Payment Gateway to enable your customers to purchase your products or pay their bills directly from a checking or savings account instead of with a credit card or debit card.
What are the differences between a Debit Card transaction and a Direct-Debit transaction?
Debit card transactions and direct debit transactions are at their core the same—each authorizes a transfer of money directly from the cardholder’s account to the merchant’s account. And, from the consumer’s standpoint they are exactly the same.
From the merchant’s standpoint however, they are very different. The transactions are processed through different networks, and the payment processing charges differ significantly.
Debit card transactions require the merchant to obtain a credit card merchant account and often to sign a long-term contract and pay a fee to open the account. Debit card transactions are processed through the same network as credit card transactions, and funds are deposited, less a commission (known as the “discount rate”), into a merchant account. The discount rate for debit-card purchases is typically lower than for credit card purchases (This is because the bank is taking less of a risk with a debit-card that deducts funds immediately from a bank account than with a credit card.), however there are some merchant processors that do not extend this discount to their clients. Typically, 2-3% of the transaction plus a 30 cent inquiry fee will be deducted from a debit-card payment and the balance will be deposited into the merchant’s account.
Direct-debit transactions use the Automated Clearing House (ACH) network to move funds from one bank account to another. Thus, you can use your regular business checking account for Direct-Debit transactions. You will need to sign a contract with a company authorized to manage these ACH transactions, but there is typically no long-term commitment. You will pay a fee for each direct-debit transaction you process—but it is typically a flat-fee that is not dependant upon the size of the transaction. (There are some companies that do charge a percentage based fee for direct-debit transactions—you should avoid these processors!). This fee is typically less than $1 per transaction.
How much can merchants save with Direct-Debit transactions?
Accepting direct-debit instead of debit-card transactions can generate significant savings for most transactions; with the rule of thumb being the larger the transaction amount the more the merchant saves. The following is a simple example using the PaySimple pricing structure:
Transaction Amount: $500
Cost to process via Debit Card (MOTO rate): $10.24 ($0.29 inquiry + 1.99% discount rate)
Cost to process via Direct-Debit: $0.55 flat
Total Savings per Transaction: $9.69
Total Monthly Savings (based on 250 transactions/month): $2,422.50
Are there drawbacks to Direct-Debit transactions?
The largest drawback for merchants accepting direct-debit payments is that unlike debit-card payments, you will not immediately know if there are sufficient funds in the customer’s account to cover the charge. With a direct-debit, you will get NSF notification in 24 hours (far better
Procurement consulting can be done on the Internet and many other companies provide consultation services for a fee. These consultants are usually experts in economics or related fields that can study, understand, and even predict the market trends. This makes them useful in the long term because they are capable of cutting costs for the company by providing legal and financial advice.Buyers can wait for prices to go down or they can predict the prices, thus reducing the investment. This prediction needs to be accurate in order to have any effect on the cost of the commodity. Sometimes big companies and amateur entrepreneurs find it hard to predict prices, and consultants are hired in order to cut down the costs incurred due to procurement.These consultants are usually experienced in all phases of purchasing an
What are the differences between a Debit Card transaction and a Direct-Debit transaction?
Debit card transactions and direct debit transactions are at their core the same—each authorizes a transfer of money directly from the cardholder’s account to the merchant’s account. And, from the consumer’s standpoint they are exactly the same.
From the merchant’s standpoint however, they are very different. The transactions are processed through different networks, and the payment processing charges differ significantly.
Debit card transactions require the merchant to obtain a credit card merchant account and often to sign a long-term contract and pay a fee to open the account. Debit card transactions are processed through the same network as credit card transactions, and funds are deposited, less a commission (known as the “discount rate”), into a merchant account. The discount rate for debit-card purchases is typically lower than for credit card purchases (This is because the bank is taking less of a risk with a debit-card that deducts funds immediately from a bank account than with a credit card.), however there are some merchant processors that do not extend this discount to their clients. Typically, 2-3% of the transaction plus a 30 cent inquiry fee will be deducted from a debit-card payment and the balance will be deposited into the merchant’s account.
Direct-debit transactions use the Automated Clearing House (ACH) network to move funds from one bank account to another. Thus, you can use your regular business checking account for Direct-Debit transactions. You will need to sign a contract with a company authorized to manage these ACH transactions, but there is typically no long-term commitment. You will pay a fee for each direct-debit transaction you process—but it is typically a flat-fee that is not dependant upon the size of the transaction. (There are some companies that do charge a percentage based fee for direct-debit transactions—you should avoid these processors!). This fee is typically less than $1 per transaction.
How much can merchants save with Direct-Debit transactions?
Accepting direct-debit instead of debit-card transactions can generate significant savings for most transactions; with the rule of thumb being the larger the transaction amount the more the merchant saves. The following is a simple example using the PaySimple pricing structure:
Transaction Amount: $500
Cost to process via Debit Card (MOTO rate): $10.24 ($0.29 inquiry + 1.99% discount rate)
Cost to process via Direct-Debit: $0.55 flat
Total Savings per Transaction: $9.69
Total Monthly Savings (based on 250 transactions/month): $2,422.50
Are there drawbacks to Direct-Debit transactions?
The largest drawback for merchants accepting direct-debit payments is that unlike debit-card payments, you will not immediately know if there are sufficient funds in the customer’s account to cover the charge. With a direct-debit, you will get NSF notification in 24 hours (far better
More than a few people prefer to form corporations to protect their businesses, but look for a more favorable tax situation. The answer, of course, is the S-corporation.For a long time, corporations were the dominant business entity available to most business. With their rigid rules protecting shareholders from personal liability for the debts of the business, they were a smart and popular choice. The downside of the corporate entity, however, had to do with taxes. Simply put, a double taxation situation arose because the corporation had to pay taxes on its profits and then the shareholders had to also pay taxes on their dividends and earnings.The IRS eventually got around to dealing with the double taxation issue. Well, Congress did. Instead of changing how the corporation was taxed, Congress enacted Subchapt
Direct-debit transactions use the Automated Clearing House (ACH) network to move funds from one bank account to another. Thus, you can use your regular business checking account for Direct-Debit transactions. You will need to sign a contract with a company authorized to manage these ACH transactions, but there is typically no long-term commitment. You will pay a fee for each direct-debit transaction you process—but it is typically a flat-fee that is not dependant upon the size of the transaction. (There are some companies that do charge a percentage based fee for direct-debit transactions—you should avoid these processors!). This fee is typically less than $1 per transaction.
How much can merchants save with Direct-Debit transactions?
Accepting direct-debit instead of debit-card transactions can generate significant savings for most transactions; with the rule of thumb being the larger the transaction amount the more the merchant saves. The following is a simple example using the PaySimple pricing structure:
Transaction Amount: $500
Cost to process via Debit Card (MOTO rate): $10.24 ($0.29 inquiry + 1.99% discount rate)
Cost to process via Direct-Debit: $0.55 flat
Total Savings per Transaction: $9.69
Total Monthly Savings (based on 250 transactions/month): $2,422.50
Are there drawbacks to Direct-Debit transactions?
The largest drawback for merchants accepting direct-debit payments is that unlike debit-card payments, you will not immediately know if there are sufficient funds in the customer’s account to cover the charge. With a direct-debit, you will get NSF notification in 24 hours (far better
What is the most valuable asset that your firm possesses? Is it your technology, trade secrets, credit line, or customer base? Although we realize the importance of these, most of us believe that our people or our leadership teams are most valuable to us. However, there is another asset that may be even more important as your business matures. A good name or reputation allows your firm to attract quality leaders, excellent employees, key customers, and financing.Proverbs 3:4 tells us that we should desire the favor of both God and Man. We are reminded that a good name is more valuable than great riches (Proverbs 22:1). In a business environment in which we demand performance quarterly and we exchange CEOs more often than our cars, a good name is a rare commodity.In recent months I was reminded that a good name
How much can merchants save with Direct-Debit transactions?
Accepting direct-debit instead of debit-card transactions can generate significant savings for most transactions; with the rule of thumb being the larger the transaction amount the more the merchant saves. The following is a simple example using the PaySimple pricing structure:
Transaction Amount: $500
Cost to process via Debit Card (MOTO rate): $10.24 ($0.29 inquiry + 1.99% discount rate)
Cost to process via Direct-Debit: $0.55 flat
Total Savings per Transaction: $9.69
Total Monthly Savings (based on 250 transactions/month): $2,422.50
Are there drawbacks to Direct-Debit transactions?
The largest drawback for merchants accepting direct-debit payments is that unlike debit-card payments, you will not immediately know if there are sufficient funds in the customer’s account to cover the charge. With a direct-debit, you will get NSF notification in 24 hours (far better than the weeks it typically takes for a paper check processed by the bank). This can be a significant concern for merchants who are providing goods or one-time services at the time of payment. But, in the majority of cases, 24 hour notification is sufficient.
Another concern is that customers will not be comfortable with giving a merchant direct access to their bank accounts. However, that is essentially what they are doing with a debit card transaction. The problem truly is one of education not of security or of process. Fortunately, that is an easy problem to solve. ElectronicPayments.org is a fantastic website that provides a wealth of customer education materials. Your payment processing company may also offer free marketing and educational literature that can be distributed to your customers.
The Bottom Line
Direct-debit transactions are just as safe as or safer than debit card transactions. Direct-debit and debit card funds are deducted immediately from customer accounts. Direct-debit transactions are just as simple to perform as debit card transactions, and both can be used for auto recurring payments, online payments, phone payments, and point-of-purchase payments. But, processing direct-debit transactions is significantly less costly for merchants than processing debit card transactions.
HTTP = HTML link (for blogs, profiles,phorums):
<a href="http://www.writeyou.net/article/2324/writeyou-Reduce-Payment-Processing-Costs-by-Converting-DebitCard-Customers-to-DirectDebit-Payments.html">Reduce Payment Processing Costs by Converting Debit-Card Customers to Direct-Debit Payments</a>
BB link (for phorums):
[url=http://www.writeyou.net/article/2324/writeyou-Reduce-Payment-Processing-Costs-by-Converting-DebitCard-Customers-to-DirectDebit-Payments.html]Reduce Payment Processing Costs by Converting Debit-Card Customers to Direct-Debit Payments[/url]
Related Articles:
Myths About Women and International Business
How to Advertise Your Notary Business
Associations Must Either Partner or Perish
Bookmark it:
|