Small Business Shared Interest Group

When running a small business, navigating the financial landscape involves dealing with costs associated with various payment methods. One significant consideration is how to handle merchant fees, which can accumulate over time. You can either pass these fees on to your customers as an extra charge at checkout or absorb them within your pricing structure.

How do you handle this in your business? Do you pass on merchant fees directly to your customers, or do you factor these costs into your overall pricing strategy?

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Chandrakanth Ananda, CMA
Senior Accountant
JTC
Doha
Qatar
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I have noticed that some small businesses are usually a bit hesitant to accept card payments, especially when the purchase amount is relatively low. This could be because the merchant fees associated with card transactions significantly impact their profit margins on smaller sales. In some cases, if a customer insists on paying by card, the business might also add a small fee on top of the purchase price to cover the additional cost of processing the payment. 

When running a small business, navigating the financial landscape involves dealing with costs associated with various payment methods. One significant consideration is how to handle merchant fees, which can accumulate over time. You can either pass these fees on to your customers as an extra charge at checkout or absorb them within your pricing structure.

How do you handle this in your business? Do you pass on merchant fees directly to your customers, or do you factor these costs into your overall pricing strategy?

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Chandrakanth Ananda, CMA
Senior Accountant
JTC
Doha
Qatar
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Hi @Chandrakanth Ananda

In my practice and experience, transparency is key both with clients and within your firm. 💡

We make sure to clearly disclose the fees associated with vendor and other merchant payments. It's like, "Hey, just so you know, if you pay with a check, there's a processing fee of ~$15, if you use AMEX, it's 3%, if you do a wire transfer, the cost is ___, and if you pay with cash, then there's no extra fee." 📊 This way, clients are fully informed and can choose the option that works best for them.

On top of that, we also offer logistical options since some transactions require additional forms or involve other vendors. It keeps things smooth and avoids any surprises. 🚀

But, I've also seen businesses-especially those dealing with high-volume, low-dollar transactions-choose to integrate these fees directly into their overall pricing. It's a different approach, but it can work well for businesses that want to keep things simple at checkout.

I'm curious, are these approaches pretty standard in your experience? Or is there another method you've found works well? 🤔

When running a small business, navigating the financial landscape involves dealing with costs associated with various payment methods. One significant consideration is how to handle merchant fees, which can accumulate over time. You can either pass these fees on to your customers as an extra charge at checkout or absorb them within your pricing structure.

How do you handle this in your business? Do you pass on merchant fees directly to your customers, or do you factor these costs into your overall pricing strategy?

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Chandrakanth Ananda, CMA
Senior Accountant
JTC
Doha
Qatar
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If the pricing is increased to cover these costs for all customers, this represents an additional 3% profit for those customers that do not pay by credit card. Small businesses need to balance the costs of merchant fees against the ease of use for customers to pay. Accepting credit cards also reduces bad debt risk somewhat. The risk is shifted from the small business to the credit card company. Credit cards also allow for faster payment.

Some merchant processors charge the customer directly. There are several government entities that handle payments this way. When one goes to make a payment to the count/city/state, if credit card is selected as the option, the customer is warned that there is an additional fee that will be added.

One of my clients adds the processing fee to the bill if the customer does NOT select the auto pay option and pays their bill when they choose. If the customer signs up for autopay with a credit card, the processing fee is absorbed by my client instead. They prefer knowing that the payments each month will be made automatically without having to wait for the customer to decide to send the payment.

When running a small business, navigating the financial landscape involves dealing with costs associated with various payment methods. One significant consideration is how to handle merchant fees, which can accumulate over time. You can either pass these fees on to your customers as an extra charge at checkout or absorb them within your pricing structure.

How do you handle this in your business? Do you pass on merchant fees directly to your customers, or do you factor these costs into your overall pricing strategy?

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Chandrakanth Ananda, CMA
Senior Accountant
JTC
Doha
Qatar
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Hey Mr. @David Belnap, that's an interesting point about shifting the risk and speeding up payments by accepting credit cards. It's true, the convenience for customers can sometimes outweigh the costs, especially when you consider the reduction in bad debt risk. 💳

I really like the idea of offering incentives for customers to sign up for autopay-it's a WINNNNN!!!!!! for both parties. The business gets consistent cash, and the customer gets the convenience and no feeeeeeeessssssss. 🏦

It's super-dope how businesses find ways to manage fees, pass them on? LOL For example, some small businesses are doing digital wallets, which sometimes come with lower transaction fees.

What are some other popular options especially as they relate to something new and sexy, like - AI!!!???? @Ahmad Jumah pls weigh in w your thoughts from having brushed up against #ai research recently?

Or are credit cards here forever and thats that? 🤔

#ai #fees #merchants #smallbusiness #payments #Automation

!

When running a small business, navigating the financial landscape involves dealing with costs associated with various payment methods. One significant consideration is how to handle merchant fees, which can accumulate over time. You can either pass these fees on to your customers as an extra charge at checkout or absorb them within your pricing structure.

How do you handle this in your business? Do you pass on merchant fees directly to your customers, or do you factor these costs into your overall pricing strategy?

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Chandrakanth Ananda, CMA
Senior Accountant
JTC
Doha
Qatar
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We believe in full transparency with our customers regarding processing charges for different payment methods. Customers are responsible for the merchant fee and are encouraged to choose the most cost-effective payment options. This helps our business save on additional costs, especially credit card fees.

When running a small business, navigating the financial landscape involves dealing with costs associated with various payment methods. One significant consideration is how to handle merchant fees, which can accumulate over time. You can either pass these fees on to your customers as an extra charge at checkout or absorb them within your pricing structure.

How do you handle this in your business? Do you pass on merchant fees directly to your customers, or do you factor these costs into your overall pricing strategy?

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Chandrakanth Ananda, CMA
Senior Accountant
JTC
Doha
Qatar
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This is a great discussion regarding managing merchant fees, transparency, revenue, customer preferences, logistics, and even AI!!!

Thank you @Sindhuja Selvakumar   @Chandrakanth Ananda   @Ahmad Jumah@David Belnap@Ahmad Jumah

for promoting the discussion!!!👏

How about this, as an example: AI can revolutionize payment processing by analyzing customer profiles and dynamically offering tailored payment options based on their creditworthiness and preferences. Imagine a world where, on-the-fly, AI establishes a line of credit, processes payments, and even negotiates with third-party processors-all in real-time! 🚀💳

Picture this: You're shopping for a new gadget, and AI instantly calculates the best payment plan for you-considering the amount, type of purchase, and even your regional preferences. It communicates seamlessly with your bank and payment processors, ensuring approval and setting up a payment plan in a flash. 🛒✨

@Ahmad Jumah what do you think of my AI idea???

Gone are the days of waiting for approvals and managing merchant fees manually. The future of payments is here-streamlined, personalized, and lightning-fast! ⚡💰

#AI #PaymentProcessing #FutureOfFinance #TechInnovation #MerchantFees #CustomerExperience #DigitalPayments #Fintech

When running a small business, navigating the financial landscape involves dealing with costs associated with various payment methods. One significant consideration is how to handle merchant fees, which can accumulate over time. You can either pass these fees on to your customers as an extra charge at checkout or absorb them within your pricing structure.

How do you handle this in your business? Do you pass on merchant fees directly to your customers, or do you factor these costs into your overall pricing strategy?

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Chandrakanth Ananda, CMA
Senior Accountant
JTC
Doha
Qatar
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