In our increasingly cashless world, it’s a fact of life that many association transactions happen using credit or debit cards—in e-commerce settings and beyond.

And electronic transactions come with fees, whether from card networks such as Visa, Mastercard, and American Express; the card providers that manage the cards for consumers; or from payment processors that help to manage the transactions.

So what can your association do to ensure it’s minimizing these extra costs when accepting credit card fees? One place to look is your payment processors—and whether the options are brighter on the other side.

The Strategy

Simply put, it’s worth shopping around for a new payment provider every once in a while.

As NerdWallet explains, accepting digital payments introduces numerous fees, including interchange fees (which are paid to the card provider), assessment fees (paid to the card network), and processor fees. The total amount in processing fees can vary significantly, averaging between 1.5 and 3.5 percent based on payment method, card network, and type of transaction, according to Payment Depot. The number of transactions your organization manages can also affect transaction fees.

Most associations interact with payment processors in e-commerce settings through their association management system, with some common providers being the PayPal-owned Braintree, Stripe, Square, Clover, and CardConnect. Looking around for alternatives might help shake out opportunities to cut down on costs down the line.

Why Is It Effective?

Knowing your options could help you uncover better rates and find alternatives to your current system. It could create an opportunity to negotiate a better deal, noted Merchant Maverick. But beyond fees, the website’s Chris Motola said that it could also uncover a better fit for reasons beyond costs.

“You’ll also want to think about security and liability,” Motola wrote. “If you’re in a high-risk industry where any business is likely to encounter a large number of chargebacks, you’re going to need to find a processor specializing in working with those kinds of businesses.”

Now, to be clear, any change you make will need to integrate through your existing application programming interface—and you may not be able to change card providers if your AMS provider does not offer an alternative—but a quick glance around the market could offer room to save some money on each transaction.

What’s the Potential?

Finding a good provider that works for your association could potentially have benefits for your members as well—because you can pitch your processor to your members via an affinity program.

For example, the American Bar Association offers its members discounted access to the LawPay service as a member benefit, creating a potential new revenue stream for the organization, along with uncovering some cost savings from a new payment processor.

After all, if you need a deal on transaction fees, it’s likely your members do too.

 

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