Payment solutions for in-store merchants.
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A good payment solution doesn’t just make it easy to accept payments, it also makes it easy for you to know what you are paying. Unfortunately, the world of payments is often a jungle of complicated price models and hidden fees. Do you know what your payment solution actually costs?
When Bambora was founded in 2015, our goal was to create payment solutions that made life easier for business owners. An important part of that mission was to change how the pricing for payment solutions worked. We wanted to give merchants a clearer and more transparent alternative, with fewer price points and no hidden fees.
In general, the industry has since gotten better when it comes to clear and transparent pricing, but it can still be difficult to sort out what things actually cost. In this guide for in-store merchants we have listed some of the things you should think about when paying for your payments.
If you want to make it easier to tell what your payments really cost, a good place to start is by looking at how many suppliers you have. By getting one supplier that handles both your card terminal and card acquiring you can collect everything under one agreement and get a much better overview of what costs you actually have. You also get the added benefit of having just one point of contact if you have a problem, as well as a single reporting tool.
Another questions you need to ask yourself is whether to buy or rent your card terminal. The most common option is to rent the terminal since they are quite an expensive one-time cost, generally over 10 000 SEK. If you buy the terminal you also have to add costs for service, updates and maintenance that are generally included when you rent. And if you choose to rent your terminal, keep an eye out so that your supplier doesn’t add fees for service, maintenance or replacement of broken terminals in the agreement.
The card acquirer, who handles your transactions, generally charges a percentage on every transaction. In many cases the acquirer uses a price model where you pay different percentages depending on the type of card (domestic debit cards are cheaper than foreign credit cards and so on). That type of model can be beneficial for bigger companies but it can also make it more difficult to calculate the costs of your card payments. The alternative is to instead pay the same percentage on all transactions, like with Bambora One. This makes it a lot easier to calculate your costs and it also protects you from increased fees on particular card types. Another, perhaps even easier option is Bambora’s “fixed” price model. This model lets you pay a monthly fee that covers all your transactions instead of paying a percentage on each transaction.
In countries like Denmark and Norway, where there are popular local cards schemes in addition to Visa and Mastercard, many merchants sign separate agreements to accept the local cards. But since almost all of these cards are “co-branded” and can be read as either Visa or Mastercard, you could actually handle these cards with your regular acquiring agreement. That means you only have one agreement and one price, making it easier for you to keep track of your costs.
This is a type of one-time fee that many companies charge to activate your agreement. When comparing payment solutions you often just look at the monthly fee and you risk missing that some suppliers charge a start-up fee for you to be able to start accepting payments. In some cases the supplier might also “hide” this fee in the shape of an unreasonably high shipping cost.
Another thing that’s easy to miss when comparing prices is that some suppliers actually charge for their support. This support fee is often obligatory but even when it’s optional you can’t really live without support if something happens. That is why you should always make sure that support is included in the monthly price and if it isn’t you need to add the support fee to the total cost when comparing payment solutions.
Reporting tool fees are another example of “hidden” fees that some suppliers charge. At Bambora, we consider a good reporting tool as a necessity that gives you control of your sales and your card transactions. Because of that, we always include our reporting tool in the price and don’t offer it as an add-on service that we charge customers for.
A final question you need to ask yourself is: what happens if you want to terminate your contract? With most payment solutions you sign up for a certain contract period but the length of that period can vary a lot. If you rent a payment terminal you usually sign a contract for at least a year, but with some suppliers the contract might span up to three years. For a stand-alone acquiring agreement the contracts are generally shorter and in some cases you can end them whenever you want. Keep in mind that if you want to end the contract before it runs out you will have to pay the monthly fees for the remaining contract period. You should also be aware that some suppliers will actually charge you an additional penalty fee if you terminate the contract early, which risks locking you into a contract that you are unhappy with.
Are you paying to much for your payment solution?
Contact our sales department and they will give you a free price comparison.
Call +46 (0)20 70 80 09 or email email@example.com