Merchant Services for Transportation

June 17, 2019

June 17, 2019

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The transportation and moving industry has unique needs when it comes to merchant services like payment processors, merchant accounts, and POS systems. This article will talk a little bit about what your merchant services options are if you own a transportation company, along with some special considerations and potential roadblocks you might encounter.Let’s get started!

Moving & Transportation Company Merchant Accounts Categories & Options

Like all modern companies, moving and transportation companies have lots of options of what payments to accept, how to accept them, and what types of merchant accounts and other services you have available depending on your needs. Let’s look at some of the options first.

Merchant Account Solutions

As far as finding merchant account solutions, you have a wide array of choices to make. As a modern merchant it’s important to be able to accept credit cards and debit cards, so you need a payment processor and merchant account that enables you to do this. Integrated merchant services companies offer credit and debit card processing and a merchant account all in one. If you choose not to go with one of these companies, you’ll have to handle each separately.If you’re a company that offers global transport, it might be important to choose a merchant services provider that offers global payments. Make sure you can process payments in many different currencies so that you don’t miss out on interested customers just because they come from a country you can’t do business with.

Pass-Through Pricing

Interchange pass-through pricing is a pricing model sometimes used by credit card and debit card processors. With this pricing model, the cost of processing payment cards is “passed through” directly to your business.The potential benefit of this for a moving and transportation company is that you get total transparency into all the fees and where they’re coming from. It can also lower overall costs. The other option is a pricing model where interchange fees are bundled together. This model sometimes includes hundreds of fees.The mark-up for the credit card companies to collect profit also tends to be higher with a bundled structure. Less mark-up and total transparency mean saved time and money for your business.

Flat-Rate Pricing

Flat-rate pricing is attractive because it’s simple: you pay flat rates that don’t change, so you always know exactly what to expect. The problem with this model is that you don’t always know what all the fees are that are being incorporated into the flat rate.At the end of the day, you might be charged a flat rate that is higher than the sum of all the actual fees. In other words, you sacrifice some cost for the convenience. If this sacrifice is worth it to you and you place a high value on the convenience of a flat rate, this is the pricing structure you should look for. If not, try to find a merchant account and payment processor that offers pass-through pricing.

Advance Payment

You can sometimes get a merchant cash advance, which is an advance payment you can get on sales processed through credit cards. This isn’t the same as a business loan. Rather, the balance is paid back with an automatic percentage that is deducted from credit card sales logged by your merchant account. The more credit card sales you make each day, the more money will be withdrawn to pay back the advance.

Integrated Merchant Services for Transportation Companies

Chargeback Alerts & Disputes

You can never completely eliminate chargeback fraud from cardholders, but too many chargebacks could spell doom for your transportation business. You can act more quickly to handle chargebacks, and minimize their impact, with a merchant services provider that gives you automated chargeback alerts.Chargeback disputes will be less painful if you are always ready with documents from every card not present transaction-based order. Make sure you have an order or invoice that has been signed, a delivery receipt, a written confirmation of the order that was sent to the customer, any contracts, sales receipts, return and exchange policies, refund policies, and any other terms of service.Also prepare screenshots of each ordering page on your website, assuming it was an online order. These documents will be invaluable evidence to ensure that chargeback disputes end in your favor. Having them ready at the outset will save you time and money.

Customer Service

Make sure your merchant account and services provider ranks high for customer service. You can determine this through online reviews conducted by third party reviewers, through information on the Better Business Bureau website, and by reading customer reviews.All other things being equal, fantastic customer service is what separates the good merchant services companies from the truly great ones. Customer service can help you with upgrades, breakdowns, and glitches so that you minimize the amount of time and revenue you lose when something breaks.

Fraud Prevention

Powerful fraud prevention measures are a critical aspect of any merchant account company or payment processing service. The company you choose should be fully PCI-DSS compliant, which means they use industry-standard security technology. Even one instance of fraud can cause an enormous expense, so excellent fraud prevention and a service-centric fraud remediation system are both things you should look for.

Multi-Bank Processing

You have the option of using a variety of providers and banks for your merchant account and payment solutions for credit card processing. But there is also something called multi-merchant credit card terminal. This is a terminal that allows multiple merchants to process their own credit card transactions through single POS. As a transportation company that runs almost exclusively card not present transactions, multi-merchant credit card terminals probably won’t come into play for your business.

Reasons Transportation Companies are Considered High-Risk Merchants

As a transportation company, you are considered a high-risk merchant. There are a few different reasons for this, but the effect is that your overall interchange rates for credit card processing will be higher.One of the main reasons is an increased risk of fraud in the global transport industry. Whether it comes internally from employees or from foreign hackers, fraud creates an expense for credit and debit card providers, card processors, and other merchant service companies. That’s why they charge more when there is a higher fraud risk to compensate for the potential cost.Theft is another reason. An increased risk of theft means that, in the event of a theft incident, your merchant services providers may take a hit. Lastly, chargebacks in the transportation industry can be more expensive than in online retail and other sectors. Higher dollar amounts for chargeback fraud mean higher risk. Merchant account solution providers pass these costs along to you.

Final Thoughts

In many ways, merchant services for the transportation industry are no different than for any other industry. However, a few unique aspects of transportation and moving companies means there are some special considerations to take into account. Once you master these, you’ll be able to save more time and money, prevent fraud, and keep more of your hard-earned gross income.  

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