by Brendon Degner | Apr 26, 2022 | covid-19, Merchant Services, small business
The COVID-19 pandemic has greatly impacted the way businesses operate, and payment processing is no exception. In addition to transitioning goods and services online and accepting remote payments, contactless payments have become essential in allowing in-person business to resume.
What Are Contactless Payments?
Although remote transactions, such as those accepted over the phone or online, might technically be contact-free, they are not the same as contactless payments. Contactless payments occur in-person and require a physical means of payment, such as a card, smartphone or wristband.
Contactless payments are processed the same as a credit or debit card, but a physical card is not necessarily needed. While tap-to-pay credit cards do fall under “contactless payments,” it is becoming more commonplace to instead have digital versions of the cards on smart devices.
Users can upload card information on a mobile device or wristband, for example, and simply tap the device on a processor when it comes time to pay. For this reason, contactless payments are also referred to as “cardless” and “tap-and-go” transactions.
Examples of card-free contactless payments include:
- Digital “wallets,” where a debit or credit card has been uploaded to a smart device
- Apple Pay, which is a digital credit card that has be pre-loaded with funds from a bank account and designed for iPhone
- Google Pay, which is similar to Apple Pay but for Android devices
- Samsung Pay, an alternative to Apple and Google Pay
How Do Contactless Payments Work?
Contactless payment is based on something called radio frequency identification (RFID). RFID is effectively a form of wireless communication that uses radio waves to transmit signals and receive data.
RFID technology has been refined for contactless payments in the form of near field communication (NFC). NFC limits the range of data transmission to within a few inches of a reader. This is a security measure that ensures a payment is almost always deliberate, since the device must come within such close proximity in order to process the data.
Why Are NFC Payments Important?
At the height of the pandemic, contactless payments allowed for the re-opening of businesses while reducing the spread of the virus. Customers and employees could feel safer knowing they would not have to physically touch to complete a payment.
Even as COVID restrictions are lifted and we return to more traditional ways of going about our daily activities, contactless payments remain an important service to offer customers. Not only are they convenient, they incorporate additional security features:
Passcode and Biometric Protected
You can set a password, fingerprint, or facial recognition requirement in order to access the device where your card info is stored.
No PIN Required
You do not need to enter a PIN. While the PIN is, itself, a security measure for card-present transactions, you always run the risk of someone seeing and potentially stealing this information.
Transaction Limits
In many cases, you can set limits for spending with contactless payment. Should a data breach occur, anyone with your card information will be limited to taking the amount you have set.
Contactless Payments for Small Business
Even as the pandemic dies down in parts of the world, contactless payments will continue to be an important service for customer convenience and security. If your small business does not offer a way to accept these types of transactions, consider speaking with a merchant services broker.
Summit Payments can help you locate a merchant services provider that will allow you to accept both card and contactless payments at your point of sale. We can also help you reduce or even eliminate certain fees associated with your provider. Contact our office today to schedule a consultation.
by Brendon Degner | Apr 13, 2022 | Education, small business
Knowing how to prevent cyber attacks is a crucial step for long-term success in your business. Small businesses are particularly vulnerable, as cyber criminals may perceive them as having fewer security resources.
As attacks become more and more sophisticated, many business owners find themselves overwhelmed with how to avoid becoming a target. Luckily, there are a few simple measures that remain highly effective and should form the basis of your cybersecurity resources. Regularly implementing these steps will help avoid potentially damaging cyber intrusion.
Top 6 cybersecurity tips
1. Use Strong Passwords
This may seem obvious, but utilizing strong passwords to access data is one of the most important steps in good cybersecurity. As a business owner, you have a lot of information you need to keep track of; it may be tempting to use the same two passwords for everything, but this poses a significant risk.
Use different passwords for each and every point of entry. This does not mean simply adding an exclamation point or a dollar sign to another password. In the event that a cyber criminal is able to discern one password, don’t make it easy on them by using the same or similar passwords for everything else.
2. Use Multi-Factor Identification
Whenever possible, use at least a two-factor identification process. This process effectively involves more than one way to prove you deserve access to certain data. In addition to the initial password, for example, you could require that someone enter a code sent to an authorized email address. Some businesses might even implement biometric authentication tools, such as fingerprint scans or facial recognition.
3. Use a Firewall
The concept of a firewall is not new to cybersecurity, and for good reason. It is a highly effective way to block undesired data from infiltrating your network. A firewall allows you to create a set of security requirements that must be met before any outside data is permitted. Information coming from suspicious or unsecure websites, for example, will be blocked and flagged.
A firewall can exist as software or hardware, though it is generally recommended you use both. A software firewall is installed directly on your device and monitors traffic through port numbers and applications. A hardware firewall is a physical piece of machinery that forms a barrier between your network and your gateway address.
4. Update Your Software
Again, it may be tempting to postpone software updates. But these updates often address new security concerns, and skipping them can leave you vulnerable. Make sure you and your employees are routinely updating software, even when it is unprompted. This will protect you from new viruses that can affect both the operating system and third party software.
5. Make Back-Ups
A particularly nasty form of cyber terrorism involves something called “ransomware.” As the name suggests, this type of virus locks you out of your files and data and holds them hostage until you pay a ransom to retrieve them. Even if you pay the ransom, you cannot be sure your data will be returned or that the attacker won’t come back.
The best way to avoid being a victim of ransomware is to make back ups. Back ups are copies of your data that are stored on the hard drive or an external storage device, such as a flash drive. Make regular backups of anything and everything you need to operate your business. In the event you are targeted by ransomware, your attacker will have nothing to bargain with.
6. Train Your Staff
All the firewalls, backups, and passwords in the world won’t make any difference if your employees are not properly trained to recognize cyber threats. Hold regular training sessions that focus on the latest scams and how to avoid them.
Employees should be advised to never open emails from unknown addresses and verify all sources before downloading anything. If possible, it is a good idea to hire an outside agent to provide professional instruction on cybersecurity.
Stay On Top of Cyber Security Threats
Credit card and bank data are primary targets for scammers. Your first point of contact for preventing a data breach should be your merchant services provider. He or she will be well-versed in the most effective cybersecurity measures as well as the latest trends for illegally obtaining data.
If you need assistance in finding a quality merchant services provider, contact Summit Payments. We will help you find the provider that best meets your specific budget, business, and security needs.
by Brendon Degner | Apr 6, 2022 | Education, small business
Merchant Services vs. Credit Card Processing
While the terms “merchant services” and “credit card processing” are often considered synonyms, they are not actually the same thing. Both concern the processing of payments for your business, but the capabilities and support available for each is quite different.
What Is a Credit Card Processor?
A credit card processor is also called a payment processor. The primary role of a payment processor is to route data from a credit or debit card to a merchant’s bank account.
A payment processor is often paired with a point of sale (POS) system to facilitate payments. The POS is the physical or digital place where a transaction occurs (e.g. where the credit card is swiped), and the processor is a component of the POS system that routes the information from the card.
In some cases, the payment processing company will provide POS equipment, customer support, and assist with things like PCI compliance. Generally speaking, however, credit card processors are limited to simply moving data from one place to another.
What is Merchant Services?
Merchant services takes the credit card processing system a step further by adding a human element that focuses on helping you cut costs, remain compliant, and stay secure. A good merchant services company offers several direct benefits to your business:
1. Merchant Services Is Your Personal Payment Expert
A good merchant services provider will be well-versed in anything related to a business accepting payments. From the best POS systems to security compliance, you will have someone you can contact to help you navigate the complexities of electronic payments.
Having someone you know you can count on to handle the entire payment process not only alleviates stress, it frees up valuable time. You can focus on actually running your business and let merchant services worry about the headache of accepting payments.
2. Merchant Services Know the System
As a business owner, you are probably always looking for ways to cut overhead costs. Merchant services can help you save money by negotiating better rates and minimizing fees. Your provider will also be aware of common “hidden charges” associated with payment processing and try to eliminate or reduce these charges. This rate and fee reduction can result in significant savings for your business.
3. Merchant Services Keep You Secure
One of the most important aspects of payment processing is keeping client information secure. You must obtain a certification stating you are compliant in this respect. If you do not have a certification or your certification lapses, you are subject to fines ranging from $5000 to $500,000.
This may sound scary, but a merchant services provider can demystify the certification process and ensure you adhere to regulations. They will know what you need to do to maintain compliance based on the types of transactions you accept each month.
Additionally and very importantly, a merchant services provider will be informed of the latest trends in cybercrime. This is an ever-growing threat and there are literally hundreds of ways data can be stolen. Your provider will teach you what to watch out for to avoid a security breach.
Finding a Good Merchant Services Provider
Finding the right merchant services provider can seem daunting. There are many, many companies to choose from, all with varying costs and capabilities. The best place to start when selecting a provider is by going to a qualified broker. He or she can suggest the merchant services provider that suits your individual needs.
If you are in need of merchant services but aren’t sure where to start, give Summit Payments a call. We have years of experience in the payment processing industry and love finding ways to save you money. Contact us to schedule a consultation today.
by Brendon Degner | Apr 1, 2022 | Education, small business
Steps to Cut Overhead as a Small Business
Running a business can be expensive: from rent to business cards to mileage, costs quickly add up. It can be useful for small businesses, in particular, to know where you can effectively reduce overhead costs without compromising efficiency or quality.
Overhead vs Operating Costs
There are two main kinds of spending associated with running a business: operating costs and overhead costs. Understanding the difference between them is a great place to start when you are looking to reduce business expenditures.
What Are Operating Costs?
Operating costs are ongoing expenses related to the actual manufacture and sale of your product on a day-to-day basis.
Common operating costs might include:
- Packaging
- Special Equipment
- Payroll
- Ingredients/inventory
Operating costs are generally considered essential to the business. While you can look for ways to reduce the cost of operation, you run certain risks. For example, you could reduce payroll expenses by eliminating certain employee positions. But this cut back in personnel could ultimately impact efficiency and productivity.
You could also attempt to save costs by switching to a different vendor for certain ingredients. However, you may lose established customers who like your product exactly the way it is.
What Are Overhead Costs?
Overhead costs are those related to the actual running of the business outside of labor, materials, and production.
Many overhead costs are considered “fixed” expenses, since they will continue regardless of whether or not the business is turning a profit. Certain expenses, such as utilities, will vary depending on the scale of the business.
Common overhead costs might include:
- Rent
- Utilities (electricity, internet, water, gas, etc.)
- Transportation
- Marketing
- Merchant services
- Insurance
- Administrative salaries (accounting, management staff, etc.)
Unlike operational costs which are more difficult to minimize, overhead costs should be reviewed regularly to see where cutbacks might be made. Switching to a better contractor with lower rates is almost guaranteed to have a positive effect on your profits.
How To Determine Overhead Percentage
Calculating your overhead percentage will help you decide if and when you need to find ways to reduce costs. While the exact percentage of revenue you are spending on overhead costs will vary depending on your personal business, most experts recommend you do not exceed 35%. To determine your overhead percentage, divide your monthly overhead costs by your monthly sales. Then, multiply by 100 to obtain the percentage.
(Monthly Overhead/Monthly Sales) x 100 = Overhead Percentage
In general, the lower your overhead percentage, the better. If it seems ridiculously low, however, you may be compromising too much. If you find your percentage is too high and digging into your profits, consider the following easy ways to reduce your overhead:
1. Downsize/Eliminate Office Space
One of the biggest overhead costs associated with running a business is rent. These days, many of us are still working entirely from home or utilizing a hybrid model. Ask yourself:
Do I even need an office?
Remote work has been shown to be just as effective as in-office work, if not more so. During COVID lockdowns, employees reported greater morale and productivity levels. This may or may not be related to the ability to work in comfortable clothing and avoid being in traffic for three hours every day.
If I do need an office, does it need to be this big and/or fancy?
How much space do you really need for the office to be efficient? Do you need an office with a private bathroom or a ritzy view of the city? Do enough people visit to warrant a waiting area?
Does my office have to be in this part of town
In Denver, rent can vary wildly depending on the district. Consider moving your office to an area where rents are not as high.
2. Hire an Accountant
While it may seem counterintuitive to hire another employee when you are looking to cut costs, an accountant is a worthwhile investment. A good CPA will help you avoid mistakes and will be knowledgeable about tax breaks and deductions that could save you thousands of dollars.
3. Review Merchant Services
These days, nearly every business requires a way to accept credit card payments. The ability to process credit and debit transactions is known as “merchant services.” Electronic payments are facilitated via a merchant account, which is essentially a bank account that allows businesses to accept credit and debit payments.
However, not all merchant services companies are created equal. Rates can vary significantly from merchant to merchant (by more than 2 percentage points!). Furthermore, many companies charge questionable fees that go unnoticed by clients. These fees can add up to thousands of dollars over time!
Like an accountant, hiring a good merchant services broker is a wise investment. He or she can help you find a company with fair rates and eliminate unnecessary fees.
4. Outsource
Outsourcing can be a great way to scale back on costs by filling employee gaps without committing to full-time pay. It is particularly useful when you only need freelance work, such as digital marketing or graphic design. In the event you no longer need their services, you can simply pause or cancel your contract.
5. Save Energy
Implementing energy-saving appliances, light bulbs, outlets, and windows can be another great investment that will cut costs for utilities long-term and give a friendly nod to the environment. You can also encourage customers and employees to go paperless, ultimately saving a lot on ink, paper, postage, and printing/copying equipment.
Locating a Merchant Services Broker
Next time you review overhead costs, be sure to review your merchant services provider. This is a common expense that is often bloated with unnecessary processing fees. Brendon Degner has years of experience helping clients find quality merchant services at fair prices. Contact Summit Payments today to schedule your consultation.
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