What are merchant rates?
Regardless of the size of your business, having proper financing options in place is key. In order to attain financial lender services, every institution offers special policies and rates. One such offering by these institutions is merchant rates, which are rates that different financial institutions apply to carry out transactions. They charge this rate to accept the payment when customers would like to pay through financing. Merchant rates vary from bank to bank, or institution to institution.
How you should view merchant rates as a whole.
Ideally, businesses offer multiple finance options with varying rates. It’s better to implement a strategy where you can adopt a mixture of rates, as opposed to offering just one option. The reason behind this strategy is that as your business grows, your expenses also grow. These expenses include marketing expenses, workspace expenses, increased employee expenses, etc. A blended, or average, merchant rate would be feasible to accommodate, if viewed as an expense necessary to grow the business.
The cost of doing business.
A business cannot flourish if it is not providing profit at an incremental percentage. This means that your business must grow with an increase in revenue. Consider if somebody asked you to adopt a certain marketing plan or business idea to invest, and assures that with its implementation, you will see an increase in profits. But for that plan or idea, you will have to pay a certain amount or percentage. Smart business owners would accept the charge as a cost of growing. This idea can be applied to financing institutions and merchant rates. While there’s a varying cost associated with offering financing, the additional payment options will positively affect your bottom line and allow for continued growth.
Multiple financing options are key for a growing business!
So, why don’t financing merchant rates matter? They’re simply a small cost of growing your business. You should invest in offering multiple financing options, just like you invest in marketing efforts or additional staff, as they’re all designed to increase revenue and foster a successful business.