Is your current payment infrastructure equipped for the demands of this holiday season? Perhaps it's the ideal moment to consider an upgrade in your payment processor. Few periods are as lucrative for retailers as the holiday shopping season. Whether your business has enjoyed a successful year or seeks to recover losses, this festive season presents the perfect opportunity to enhance sales and revenue.
A robust holiday season also ensures that you kick off the next year with robust cash flow and potential reserves for business reinvestment. In fact, holiday sales contribute to 20-30% of most retailers' annual revenue. However, to fully capitalize on the holidays, you wouldn't want anything within your business to act as a hindrance.
For instance, ensuring your inventory and suppliers can handle the increased demand is crucial. It also involves mapping out a promotional strategy that entices eager shoppers. Yet, one often overlooked aspect is your payment processing. The holiday shopping surge can introduce new customers to your store, and these customers might prefer different payment options than you currently offer.
Another factor that could impede your holiday sales is excessive fees associated with credit card processing. High fees eat into your profit margins with each sale, essentially throwing money out the window.
These are just a couple of examples, but the right payment processing solution can address these issues, helping you maximize profits and minimize costs during this holiday shopping season.
Below, we'll delve into how upgrading your payment processor can boost profits, cut costs, enhance customer service, and streamline your business operations.
Signs That You've Outgrown Your Current Payment Processor
Most small businesses secure a merchant account through a payment processor during their business launch. Understandably, with myriad concerns during a business launch, you likely opted for the first seemingly reliable payment processor you could find. While this is a common and practical approach, it also implies that you've likely outgrown your initial choice, and it might be time for an upgrade.
It might not be immediately apparent, but the wrong payment processor can impede your business with every transaction. Here are some signs that you might have outgrown your payment processor, and a switch before the holidays could translate to significant savings and increased sales:
1. Outdated Equipment: Electronic payments have evolved in recent years, with changing payment technology and customer behavior. Customers now expect various digital payment options at every retail establishment. Failure to support modern payment methods like digital wallets could result in missed sales.
2. No Point of Sale (POS) System: A POS system can significantly enhance business management and sales analytics. It streamlines payment processing, accelerates checkout, and offers benefits like inventory management and real-time reporting. If your business has been hesitant to adopt a POS system due to issues with your payment processor, it's a signal to upgrade.
3. High Processing Fees: Excessive processing fees can erode your profit margins. While fees are inevitable, finding a payment processor with lower fees and a better fee structure can save you thousands. If you signed up for your current processor with little business history, you might be paying higher fees that were initially justified by the perceived risk.
4. Long Contracts: Some retailers might be unaware of being tied to lengthy contracts with their payment processors. Automatic renewals before expiration, especially with an evergreen clause, can be detrimental. If you find yourself in such a situation, it's a good reason to leave and seek a payment processor that aligns better with your needs.
5. Poor Customer Support: Inadequate customer service from your payment processor can lead to financial losses and customer dissatisfaction. Timely resolution of payment-related issues is crucial during busy periods, and if your current processor is slow to respond, it might be time for a change.
6. Using an Aggregate Payment Provider: Aggregate payment providers like Stripe or Square pool merchants into a single account, offering quick signup but often at the cost of higher fees. Switching to a dedicated merchant account provider can lead to lower fees and more personalized service.
How to Upgrade Your Retail Payment Processor
Switching to a new payment processor is a straightforward process. With a bit of research, you can seamlessly upgrade without downtime, immediately benefiting from cost savings and efficiency gains. Here are key considerations when upgrading your payment processor:
1. Choose a Fully Integrated Payment Solution: Opt for a fully integrated payment system that communicates seamlessly with your other business software. This integration streamlines operations, reduces labor costs, and provides advanced analytics for customer insights.
2. Mobile Payment Solutions: Depending on your business, mobile payment solutions can broaden your customer reach. With a significant portion of holiday shopping done on mobile devices, supporting mobile payments can enhance the customer experience.
3. Transparent Pricing: Transparent pricing is crucial for understanding your fees and monthly charges. Look for a processor that clearly explains all fees and charges, avoiding any hidden or unnecessary costs.
4. Full Payment Options: Offer diverse payment options, including credit and debit cards, as well as popular digital wallets like Apple Pay and Google Pay. Providing more choices can increase sales and cater to varying customer preferences.
How Complicated Is It to Upgrade Your Payment Processor Before the Holiday Season?
Concerns about downtime or disruption often deter businesses from switching payment processors. However, the process is relatively simple, even for large businesses or chains with multiple locations. Most of your existing business systems will remain unchanged, requiring only a configuration update to access the new payment processor.
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