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Consumers in the United States (U.S.) have been flipping-out the plastic to pay for purchases since 1959. Even then, credit card usage among consumers was rare when compared to cash payments, particularly for routine smaller purchase amounts. Prior to the introduction of credit cards, merchants often carried their own accounts receivable and advanced credit to their customers. Today, credit cards have become the way the vast majority of consumers pay for purchases no matter the purchase amount. Ask any merchant and they will tell you that credit or debit cards account for 60 to 90 percent of sales, depending upon the industry. According to the Federal Reserve, Americans used credit cards to pay a record 40.8 billion times in 2017, and those payments totaled $3.6 trillion. Nearly 70 percent of Americans have at least one credit card.
While many merchants and consumers alike will lament the benefits of cash over credit, cash transactions are clearly taking a back seat to credit in today’s mobile economy. But the convenience of all the plastic comes at a cost, particularly to all the merchants whose business relies on accepting cards. The fees associated with processing credit cards amounts to more than $90 billion each year. Each merchant will pay 1.7 to 3.5 percent of each sale in transaction fees, flat fees, and incidental fees associated with credit or debit cards. While this may appear to be a reasonable, incidental expense, even small, upward fluctuations in these fees can contribute negatively to a merchant’s bottom line. It is important that marketers are aware of these costs and remain open to reviewing the benefits of an alternative provider.
Junction Creative Solutions (Junction) is an award-winning strategic agency committed to creating high impact solutions for SMBs and Fortune 500 companies alike. “Our years of experience with large as well as smaller, emerging companies has provided us the opportunity to understand the complexities often associated with operating expenses that confront our clients each day,” says Julie Gareleck, founder and CEO of Junction. “It’s easy to get lost in the discussion around interchange, monthly fees, chargebacks, and other unanticipated costs associated with credit card processing.”
Junction’s team of professionals educates and simplifies the process of determining the best way forward in selecting the right merchant services provider for each client. We partner with the largest merchant services company in the U.S. to provide our clients with a rate review and assessment, as well as assisting with setting up a new account. The simplified application process is transparent from the first conversation until final account completion and can often be accomplished within 24 hours.
Major processing providers are currently initiating increases in their merchant rates. For a complimentary rate audit to help you identify potential cost savings, call Junction today at 678-686-1125.