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How Can In-Store Payments Drive Customer Loyalty? - Beyond Bancard

How Can In-Store Payments Drive Customer Loyalty?

In today’s fast-paced retail landscape, businesses continually seek ways to enhance customer loyalty. While e-commerce and online shopping have grown significantly, traditional brick-and-mortar stores remain a vital component of the retail industry. To thrive in this competitive environment, retailers need to leverage in-store payments as a strategic tool to drive customer loyalty. In this blog post, we’ll explore how an in-person payment processing provider can play a pivotal role in building lasting customer relationships. 1. Convenience is Key One of the primary reasons customers choose to shop in physical stores is convenience. In-store payments offer a streamlined and efficient way for customers to complete their purchases. By providing multiple payment options, such as credit cards, debit cards, mobile wallets, and contactless payments, retailers make it easy for customers to pay in the manner they prefer. Efficient and hassle-free payment experiences leave a lasting impression on customers. When customers know they can count on a quick and straightforward payment process, they are more likely to return to your store for future purchases, ultimately fostering loyalty. 2. Personalized Payment Options An in-person payment processing provider also allows retailers to offer personalized payments, including contactless payment provider options. Loyalty programs and mobile apps can collect valuable data about customers’ preferences and shopping habits. Retailers can use this information to tailor payment options and promotions specifically to each customer’s needs. For instance, if a customer frequently shops for clothing, the retailer’s app can provide tailored offers like in-store loyalty programs or discounts related to apparel. Personalization not only enhances the shopping experience but also strengthens the bond between the customer and the brand. 3. Loyalty Programs and Rewards Many retailers have implemented loyalty programs that offer rewards for in-store payments. These programs often provide points, discounts, or exclusive offers to customers who make repeat purchases. Loyalty programs encourage customers to return to the store to earn and redeem rewards. Moreover, integrating loyalty programs with in-store payments allows retailers to track customer behavior and preferences more effectively. This data can be used to refine loyalty program offerings, ensuring they align with what customers truly value. 4. Seamless Integration with Mobile Apps Mobile apps have become a powerful tool for retailers to enhance the in-store shopping experience. Retailers can integrate in-store payment functionalities into their mobile apps, allowing customers to make payments directly from their smartphones. Additionally, these apps can provide features such as digital receipts, order tracking, and personalized recommendations. These added benefits make the shopping experience more convenient and enjoyable, fostering customer loyalty. 5. Enhanced Security and Trust Security is a top concern for both retailers and customers. In-store payment solutions often incorporate advanced security measures, such as encryption and tokenization, to protect customers’ sensitive payment information. When customers trust that their data is secure, they are more likely to return to the store and continue making payments. Building trust through secure payment processes is a key element of customer loyalty. Customers are more likely to become loyal to a brand when they feel confident that their financial information is protected. 6. Improved Customer Service Efficient in-store payments also contribute to an overall positive customer service experience. Long checkout lines and complex payment procedures can be frustrating for customers. Streamlined payment processes, such as contactless payments or self-checkout options, reduce wait times and enhance the overall shopping experience. When customers consistently have a positive and efficient experience at your store, they are more likely to become loyal patrons who return again and again. 7. Integration with Inventory Management In-store payment systems can be integrated with inventory management systems to provide real-time information about product availability. This integration enables customers to check the availability of items, place orders, and make payments seamlessly, even if the desired product is temporarily out of stock. By offering these conveniences, retailers can mitigate the frustration of customers who might otherwise leave the store empty-handed. This proactive approach not only drives loyalty but also contributes to increased sales. 8. Social Media Engagement In-store payments can also be linked to social media engagement. Retailers can encourage customers to share their in-store experiences on social media platforms by offering incentives or discounts for check-ins or sharing photos of their purchases. Engaging with customers on social media and rewarding them for their loyalty not only strengthens the customer-retailer relationship but also expands your brand’s reach to a broader audience.  Conclusion In-store payments are a crucial component of the overall shopping experience and can significantly impact customer loyalty. There is a myriad of in-store payment benefits. Retailers that prioritize convenience, personalization, and security in their in-store payment processes can build lasting relationships with customers. By leveraging loyalty programs, mobile apps, and integrated systems, retailers can create an exceptional shopping journey that keeps customers coming back for more. In-store payment experiences embrace customer satisfaction. In today’s competitive retail landscape, the key to success lies in understanding and meeting the evolving needs of customers. In-store payments represent an essential touchpoint where retailers can exceed customer expectations and foster loyalty while a contactless payment provider offers their own perks as well. As technology continues to advance, retailers who embrace innovative in-store payment solutions will undoubtedly gain a competitive edge and drive long-term customer loyalty. Best In Person Payment Processing Provider As both a contactless payment provider and in person payment processing provider, Beyond Bancard is your trusted source for merchant services payment processing solutions. We offer tailored support to ensure our customers provide their customers with secure transactions. Call today and see what we can do for you –(844) 365-3050.

What are Contactless Payments? - Beyond Bancard

What are Contactless Payments?

Contactless Payments can be made with your credit card in two main ways: through mobile wallets like Apple Pay, Google Pay or through contactless technology embedded directly into the card itself. Contactless payments are not only more convenient, but they’re more secure, too – and now more hygienic. If your card has contactless technology, simply hold it up to the card reader to complete your transaction. Keep in mind, the payment terminal or POS will need to have near-field communication (NFC) capability, so this won’t work for older card readers. Learn more about components of a POS. Contactless transactions have increased dramatically since 2016, especially in the next two years. In 2016, only 3% of all credit cards were capable of completing a contactless transaction. In just the first quarter of 2020, MasterCard’s contactless transactions increased by 40%. And surveys have indicated that more than half businesses will continue to use contactless even after the pandemic. Using your tap-to-pay device to pay for groceries or pharmaceuticals has grown by more than 100% year over year, according to Visa. Overall, contactless usage in the United States has grown 150% since March 2019. How do Contactless Credit Cards Work? Contactless credit cards don’t require you to insert your card chip when you make a purchase. The cards use EMV (chip security developed for Europay, Mastercard, and Visa, but now widely used by many cards) with NFC (near-field communication) for proximity payments. Contactless cards can be used like a standard chip credit card or for “tap-and-go” payments similar to Apple Pay and Google Pay. Contactless cards are certainly not new to the international market – they have been around for years in much of Europe and Australia. They have, however, been slow to catch on in the U.S. U.S. credit card issuers have begun (if not completed) the switch to contactless cards. Most credit cards are likely to offer contactless payments in the next year. While you’re waiting, here are our favorites from each issuer with tap-and-go features. Are Contactless Payments more Secure? For each contactless transaction, a unique one-time token is sent to the payment terminal. The token does not contain any of your card details, so if the purchase is compromised, that token cannot be used to make another purchase. This added layer of protection is the same one used when you insert your card’s chip into a card reader, but contactless payments process much faster (about half as long). In addition to the PIN, password, fingerprint or facial recognition already required for mobile wallets, payments need to be verified as well. By getting physically close to your wallet, thieves may be able to steal your data electronically by using NFC card readers. Tokenization, however, would prevent anyone from accessing your credit card data unless they were extremely close to it (within four to ten centimeters). What are the benefits of Contactless Payments? Consumers and retailers both benefit from contactless cards because of speed. Using contactless, you can complete a transaction that would normally take 30 seconds by inserting an EMV chip in 15 seconds on average. As a result, retailers can serve more customers in a day. However, physical safety must also be considered. Contactless payment methods are becoming more popular as people look for ways to minimize their contact points to prevent the spread of COVID-19. Due to slow adoption of contactless payments in the U.S., retailers have been slow to adapt their point-of-sale terminals and hardware. Retailers are improving their systems in response to contactless payments becoming more popular as mobile payment options have grown. Consumers were concerned about security. A common misconception about NFC payment technology is that thieves can easily steal your credit card information by getting close to your card with a reader. Contactless payments are just as secure as if you inserted your chip into a reader. As each transaction generates a one-time code rather than the same information being sent every time you pay, no one would be able to steal your card information even if they got close enough to it with a reader (which seems unlikely). What is the Future of Contactless Payments? Contactless payments are not as popular in the U.S. as they are elsewhere, but they are becoming more popular by the day. Almost all transactions are processed by NFC-enabled terminals, and the number continues to grow. Furthermore, most individuals have access to mobile wallets through their smartphones. Additionally, many merchants offer contactless payment options through their apps. Through their apps, you can make contactless payments at Dunkin’ Donuts and Starbucks, for example. Almost all major card issuers in the U.S. have begun deploying contactless card technology or have announced plans to do so. In the event that your card isn’t equipped with contactless payment technology, you can still add it to a mobile wallet and make touch-and-go payments that way. You can make contactless payments as long as you have a smartphone. Credit cards and payments using contactless technology are wildly popular abroad, but they have been slow to catch on in the United States. This is rapidly changing, however, with the outbreak of Coronavirus, the spread of NFC payment terminals, and nearly every major U.S. bank issuing contactless cards. We live in a world that is increasingly secure, fast, and touch-free, so it’s no surprise that contactless has taken off in the U.S. and several other countries.

How Is the Interchange Rate Charged? - Beyond Bancard

How Is the Interchange Rate Charged?

Accepting credit card payments allows you to offer multiple payment options to your customers and grow your business. They are a quick and convenient way to make a payment in-store or online, especially when it comes to contactless payments. And, while credit cards are essential for every business, they do have one negative side: interchange rate. What Is an Interchange Rate? An interchange rate is a fee the merchant’s bank pays to the card-issuing bank for every credit or debit card transaction. Also known as a swipe fee, it is charged to cover the bank’s handling costs, fraud and bad debt costs, and for the risks associated with accepting credit card payments. This fee is set by the credit card companies, such as Visa, Mastercards, and AMEX, and varies from one company to another. Apart from the company, many other factors determine the value of the interchange rate, such as type of transaction, type of card, location, levels of data, etc. Learn more about NFC Mobile Payments. Understanding the Interchange Rate The interchange rate is paid by the merchant for accepting credit card payments. It is charged by the card-issuing bank, credit card payment network (Visa or Mastercard), payment processors (the issuing bank or a third party), payment gateways, and the merchant’s bank. They all charge a small percentage of each credit card transaction plus a small fixed amount, e.g. 1.5% + 0.20. This fee is paid to the card-issuing bank whereas card associations take a minor fee called “network fee” which is smaller, around 0.05%. Interchange Rate Paid to the Card-Issuing Bank The card-issuing bank charges this fee because it is the entity that advances credit to consumers and takes on the risk associated with credit card approval and transactions. Since they are the responsible ones, they collect the biggest percent of the fee charged. But, how do these banks make a profit? Most people think banks profit from charging late payment fees and interest to people who have fallen into credit card debt. Although there is some truth, most of their profit actually comes from charging interchange fees. Just think about it… Millions of people use credit cards for making payments each day and the bank charges a small fee each time they use their card. That would be something like charging 0.1% on millions of daily transactions…. And, that’s A LOT! Interchange Rate Paid to Credit Card Networks The biggest percentage goes to the card-issuing bank, but there is also a certain amount paid to credit card networks, such as Visa and Mastercard. Although these networks charge a minor fee of around 0.05% per transaction, they also collect a lot of money because there are millions of transactions made per day with cards issued by them. Let’s say that 3-4 million people use Visa and Mastercard cards to make around $50 per day. $0.025 is charged per transaction, which means these networks collect $75.000 – $.100.000 per day. And, the actual number of people and transactions is far higher. So, imagine the networks’ profit per day, month, and year. No wonder Mastercard has made something over $8.1 billion in net revenue in 2019. Interchange Rate vs Credit Card Processing Fees As a merchant, you need to be aware that the interchange rate doesn’t make your credit card fees. It does make 70%-90% of them, but it’s only part of your processing fees. It’s because your payment processor and credit card company also get part of them. The Interchange Rate Isn’t Static We know that you know the interchange fees, but do you know that they aren’t static? Banks and credit card networks regularly change the interchange rate based on the current value of money, costs of money transferring, and the risk associated. For example, Visa and Mastercard change their interchange rates twice a year, in April and October. That’s why you need to keep an eye on your transaction rate and check it regularly. The Interchange Rate Regulation You may or may not know that there is a special regulation for setting the interchange rate. It’s known as The Durbin Amendment and was introduced in 2010. This law limits the transaction fees charged by debit card issues upon merchants. After its passing, the interchange rate went from 1%-3% per transaction, which was around $0.44 on average, to $0.21 + 5% of the transaction amount. This regulation was created because the interchange rate was too high and non-proportional to the card issuers’ costs. In order to cope with the reduced fees, some banks have implemented new fees and removed free services to prevent revenue losses. How Is the Interchange Rate Calculated? The interchange rate is set by the card-issuing company (Visa, Mastercard, AMEX, Discover) and paid by the merchant bank. It’s usually set on a semiannual basis, but can also be set annually, depending on the credit card company. Every credit card company sets a different interchange rate, which depends on various factors. The rate is in the form of percentage with companies defining it as a flat rate plus a percentage of the sale’s cost. Factors Affecting the Interchange Rate Card Type One of the factors that affect the interchange fee is the type of card used to make payment. Namely, debit card transactions have around 6 times lower rates than credit cards because they are much easier and safer to approve. This is because the funds come from the customer’s bank account and it’s simple to confirm that there is enough money for the transaction to complete. On the other hand, credit card transactions require the card-issuing bank to extend the credit to the customer and then cover the cost of the transaction themselves. Another reason for higher fees is the higher chance of fraud, which is often nowadays. Apart from these two card types, customers can also use rewards cards. These cards cover a part of the transaction cost, but in return have a higher interchange rate. Hence, while the customer pays less, you, the merchant, pay more for their perks. Rewards cards especially …

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Credit Card Processing Fees Explained - Beyond Bancard

Credit Card Processing Fees Explained

Essential things to know about credit card processing fees When one thinks about merchant account offerings, credit card processing strikes as the most demanded service today. The credit card transactions crossed the figure of 45 billion as per the 2020 Federal Reserve report related to card bank profitability. Despite the effect of the COVID-19 pandemic, the future of the credit card processing market seems bright as the rising sun. Many merchant ventures might be keen to adopt and know more about offering credit card payment options to their clientele. One of the critical elements of the credit card payment industry pertains to credit card processing fees. Beyond Bancard can help you discover what credit card processing fees entail for you. What does the term credit card processing fee denote? Primarily, credit card processing fees refer to the overall charges that a merchant entity has to bear to accept credit card payments from their respective clients. Why do merchants have to oblige to such charges? Let us take you behind the scenes of what aspects kick start once you swipe a credit card for payment. A merchant swipes to accept payment; their selected credit card processor will get a payment authorization notification. Thus, all the transaction details are shared with the appropriate card network like Visa or Mastercard. The issuer bank of the customer who swipes the credit card shall confirm the authenticity and ability of the client to pay the required sum. In case of any issue, the issuer bank shall disapprove the transaction. However, if all compliances get met, the transaction gets approval. The intimation of acceptance or denial of the payment reaches the merchant venture’s bank via the card network. Hence, the amount is deposited in the merchant account for the waiting period. Later, it transferred to the merchant business’s bank account. Learn more about what is a POS System. What are the prominent pricing models involved in credit card processing? Percentage markup model Also known as the interchange plus model, the service providers impose an extra percentage cost over the interchange for each card payment under this model. The amount payable under this model depends on the type of credit card that the provider process. Tiered rate Under this pricing model, the provider classifies the credit cards to be processed in different tiers. They hold the authority to charge merchants arbitrarily based on factors like the popularity of the credit card plan and the level of services covered. Flat rate It is one of the most popularly used models. Card processing parties impose a fixed rate instead of percentage markup under this pricing model. The flat rate levied varies from 0.5 percent to around 3 percent as per the card network associated. What are the necessary components that fall under the ambit of credit card processing fees? Generally, the significant variants of credit card processing fees cover 1. Transaction fees This type of charge is associated with every credit card transaction that a merchant undertakes from his client. Every user has to pay the card network ventures like Visa and American Express for accepting credit cards. Generally, transaction fees get further bifurcated into two forms of charges. These two forms of payments stand as mandatory costs that credit card processing entities levy on merchants. Interchange fees The interchange rate represents the costs that issuing banks levy on the receiving bank for every credit card transaction its customer initiates. Interchange fees represent the source of income for issuing banks to assist in the payment process. The interchange fee is primarily a non-negotiable charge that merchants have to bear regardless of the card processor they engage. Banks calculate the interchange rate as a percentage of the transaction amount involved. It also stays subjective to the credit card type that one runs. Per-transaction fees The cents per transaction charges are flat fees that merchant ventures need to pay for every customer credit card payment that their card company processes. In the US, usually, this fixed fee ranges between 20-30 cents for every payment. 2. Recurring payment fees The card networks and banks can also impose other forms of transaction fees that are actually not essential by nature. These recurring fees act as a way of generating additional revenue for card companies. Common types of recurring payment comprise: Statement charges This type of recurring fee refers to the costs of administration of the accounts of various merchants. Service providers include these fees to deploy offerings like periodic statements. Monthly minimum costs The bare minimum charges that credit card processors levy on businesses irrespective of the fact that the volume of credit card payments accepted fall below the pre-determined limit. IRS report fees This type of recurring fee represents the form of charges that merchants have to pay to their payment processor for showcasing respective information to the Internal Revenue. Next day funding charges There are instances where merchants might want to receive their funds the very next day the respective credit card transaction processes. In such instances, the merchant has to bear next-day funding fees from the processor. Batch fees Another sub-category of recurring payment that some merchants have to pay includes the batching costs for multiple transactions. In the case of various credit card payments throughout any given day, the payment processor processes a whole batch of different transactions together. Thus, they deposit funds for an entire batch rather than a single payment. 3. One-time costs Merchants who want to offer credit card payment options to their clients must also consider the one-off charges that come their way. Such one-time credit card processing fees include setup charges, terminal fees, payment gateway charges, PCI compliance costs, address verification charges and chargebacks.

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