Due to the ease and safety of carrying plastic over cash, credit cards are the preferred method of payment amongst two-thirds of all consumers. Businesses equipped with card card terminals are able to process sales with greater efficiency – often times on expensive items that few customers would purchase through any other means.
Simply put, swiped transactions are a win-win deal for both sides of the sales process. On the other hand, keyed transactions were a costlier affair until the recent introduction of mobile card processing.
The Impact of Keyed Transactions on Merchants
One of the most frustrating situations to occur at a checkout line is the non-acceptance of a card swipe. Whether it’s because of a worn out magnetic strip or a faulty reading system, perfectly financed credit accounts do not always respond when called upon by card holders. For instances of card-swipe failure, key-ins serve as the alternate route in sales transactions. While annoying for consumers, the cost of key-ins for merchants goes straight to their bottom line.
For merchants, keyed-in transactions result in higher interchange fees. The fees are higher due to the risks involved with key-ins, which often occur from remote locations with no face-to-face contact between buyer and seller. Lower fees meanwhile, are assigned to swiped transactions because of the in-person assurance factor. While some key-in sales inevitably occur at the checkout, card companies do not make that distinction.
Another issue involves the time and verification delays of keyed-in sales. Whereas swiped transactions are processed instantly, keyed transactions can take in excess of 24 hours to clear the banks – and herein lies the risk factor. As a means of security against chargebacks and verification failures, credit card processing companies set higher, non-qualified rates on all keyed-in transactions. For small-time merchants, key-ins can be a burdensome addition to the costs of running a business.
Cost-Cutting Measures for Credit Card Processing
The ability to process credit cards without excess fees is crucial to businesses large and small. One of the biggest problems for merchants – especially those who operate on foot – are the prohibitive fees that stem from the sales practice of collecting numbers in one location and keying them in at headquarters.
Fortunately, the arrival of mobile technology has made it easier than ever to process credit cards remotely with no additional fees. Here at North American Bancard (NAB), we have developed a mobile processing system that merchants can utilize at any location. Contact our account specialists to learn about more ways for improving the POS mechanisms and profitability of your business with the services of NAB.
