September 2015

Every business needs to make and receive payments in order to operate. A child’s lemonade stand on a neighborhood street corner may only need a shoe box and a few dollars in change to be open for business. Most companies, however, need far more sophisticated tools to manage payments effectively, for sales and purchases alike.

In today’s economy, customers (both consumer and B2B) expect the businesses they purchase from to accept a method of payment that’s convenient for them. These methods can include credit cards, debit cards, online, mobile, electronic checks, and more. While necessary to bring in revenue, these systems create costs for merchants. In addition to the investment in technology and systems, these forms of payment carry transactional and fixed fees that may be as high as 5 percent per transaction.

Since payment processing solutions are themselves an investment, a business must choose the right ones to ensure it’s getting the best return. The first step is education. Becoming familiar with the basics of credit card processing will help you make an informed choice.

Once you’re ready to choose a payment processing solution, make sure to ask essential questions to ensure that your business gets the best return on its investment:

• If your business typically processes a low volume of high-dollar payment transactions, ask to negotiate fees that are based on ticket size (average amount of a credit card sale).
• If your business typically processes a high volume of low-dollar payment transactions, then ask to negotiate per transaction fees.
• Check monthly minimum fees and annual service fees; these may be negotiable as well.
• If your business conducts transactions in person and online, understand that you’ll typically pay lower fees for the in-person transactions, since there’s less risk of fraud and chargebacks.
• Some processors allow a business to purchase equipment, while others will provide equipment as part of their service. Make sure you ask about and understand these options.

“Chipping In:”

Major US credit card issuers are migrating toward cards equipped with EMV technology, or computer chips, to authenticate transactions and protect consumers from fraud. As of October 1, 2015, liability for fraud in transactions in which a credit card is present will shift to the least EMV-compliant party in the fraudulent transaction. So, if fraud takes place involving a card from a financial institution that offers chip technology and a merchant who that hasn’t upgraded to accept chip technology, the merchant will be liable for the fraud.

All Innovatix credit card processing vendors offer EMV solutions.

The Innovatix contract portfolio offers a number of choices to help our members find the payment processing solution that works best for them. Our payment processing solutions vendors include Paymentus, Solupay, Summit Merchant Solutions, Sun Communications, and USPAY. All offer payment solutions that include point-of-sale credit card terminals, mobile credit card processing, online and telephone payments, and more.

Of course, when it comes to payment solutions, how a business chooses to accept money is only half of the equation. With the right tools, a business can see tangible financial returns on its own spending as well. Businesses that use payment solutions rather than cut checks to suppliers and vendors each month can save time, improve cash flow, and earn incentives.

Innovatix contracted supplier American Express offers a variety of payment solutions that cater to different business needs. According to American Express, businesses using these solutions can

• streamline processes and better analyze spending with a single payment solution and Web-based tools;
• improve cash flow management and access to working capital by extending the payment cycle by 30 – 45 days; and
• earn significant cash back and other incentives that turn accounts payable into a revenue-enhancing function.

Payment solutions may sound complex – costs associated with accepting payments, financial returns accounts payable—but with a little comparison shopping, doing business can be easier and more profitable than ever.

Innovatix Payment Solutions Vendors

Payment processing

Accounts Payable