Posted by Sarah Jordan

A well-known foreboding statistic is that 75 percent of businesses fail in the first two years; and it’s not as if you’re in the clear after that. In almost every tactical aspect, small businesses are at a disadvantage—health insurance, financial and employment resources, brand leverage, taxation, and the list goes on.  These facts contribute to (if not explain) the above figure.  But while that statistic might paint the picture that small businesses are fragile or volatile, the recession and most recent economic crisis has been revealing otherwise. 

Even more than usual, article links about small businesses have been flying around our office.  One article from CNN illustrated the “hits” that small business have been taking, but aren’t anywhere close to throwing in the towel.  Here are some of the business owners’ comments:

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Popularity: 27% [?]

Posted by Allen Wolff
Co-authored by Jeff Slusarz, PaySimple Customer Support Manager

What is customer service? We think the composition of the words is actually misleading as it should really read “servicing customers” with the priority on the service. As a small business owner, you should ask yourself: Do we train adequately on customer service? Where does it sit on our corporate values? How do our resources align with its place on our value chain? These are all questions that surfaced in our discussions with regards to our intention of how service should play a role at PaySimple. If you raise these questions, though, you’d better be prepared to address them–as you might be surprised by the answers.

In our experience, we have found three components that are critical to creating raving fans through our service. They are simple, but go a long way:

• Don’t just listen to what clients say, but hear them.

• Have empathy. We’ve all needed customer service, so assume you’re helping your neighbor or grandmother.

• Make communication as high a priority as the resolution. If you can’t resolve the issue today, then be proactive in letting the customer know that.

More often than not, when we pass along the customer service reigns to team members, we ask them to listen to the issues and work diligently to resolve them. Listening, however, is only one step. For when we really take the time to “hear” a customer’s feedback, the impact can be well beyond the one issue at hand.

We’ve made improvements to our own customer service—and here’s what you think:
We want you to know that we are listening. We have recently implemented a trouble ticket and survey system to get feedback for each support issue. To date, we have found:

• You think we passionately take ownership of an issue and effectively resolve it 82% of the time.
• You think we complete issues in a timely manner 78% of the time
• You think we are 82% effective in respecting your time and following up.
• We close 90% of support issues within 24 hours.

We appreciate the feedback and pride ourselves in improvement and growth, which we will share via posting on our website – hopefully illustrating the outcome of our listening skills.

If you have contacted us in the last few months, you may notice the way we answer the phone is slightly different. Although feedback is mixed, our aim is to answer each call authentically and prepared to assist you to our best ability. In a recent Wall St. Journal small business article, a customer who visited our office referred to us as “hippy-ish and reminiscent of the dotcom startups of the late 90s.” Wow, if we can establish a reputation of providing “Peace, Love, and Payment Processing,” we’d consider ourselves pretty successful. Maybe it’s not so much that we’re “hippy-ish,” but that Passion, Authenticity and Happiness are foundations of our company values.

Popularity: 12% [?]

Posted by Jeff Gardner

I’ve spent the last couple of days at NACHA Payments 2008 meeting a variety of industry leaders in the payments space as well as doing my fair share of learning. The conference–hosted by NACHA, a non-profit organization that oversees the ACH Network–offers an abundance of sessions, many of which were highly appealing. It is one of the biggest conferences of the year in the payments space, and it was great to be in attendance as both a student and a representative of PaySimple.

I also had the pleasure of leading a session on small business payment preferences and trends. The basis for the presentation was the findings of a recent survey on small business payment behavior commissioned by PaySimple, and conducted by Market Platform Dynamics. My co-presenter, Karen Webster gave an excellent overview of the state of electronic payments within small businesses today. We were able to glean some very interesting nuggets of information from the study. Among them:

• Collecting online payments is a top strategic business priority for many small businesses
• 52% of those surveyed would give up coffee for a week if they could collect payments from customers faster and less expensively!
• Tech savvy businesses are more likely to accept electronic payments
• 61% of respondents have a Web presence; only 26 % accept payments on their website
• Less than 13% use electronic means to generate and send customers invoices
• Small businesses that accept electronic payments want a better solution and are willing to switch providers to get it
• Roughly 70% of the survey sample believe that within the next two years 50% of their payments will be via electronic methods

You can download the full results of the small business payments survey here. All in all, NACHA Payments was a fantastic event and I’m glad to have attended the last couple of years. PaySimple is forging a new path in payment processing for small businesses and we look forward to continuing to be both a value added provider as well as an industry resource for years to come.

Popularity: 12% [?]

One frequently asked question and how it relates to small business’ revenue and profitability.

Posted by Jeff Gardner

At PaySimple, our dedicated employees have the wonderful job of guiding small business owners towards enhanced profitability. As such, one of the frequently asked questions our staff encounters is: “What payment types should I accept from my customers?” Merchants want to know if they should offer ACH (also known as eCheck), credit cards or both. Today’s blog will explore this question.

The first criteria we’ll explore is the fee charged for each transaction type. To do this, you must first determine the size of your average ticket. Are your customers buying inexpensive items such as a $5.00 monthly subscription to your newsletter or are they buying $500 digital cameras? Based on PaySimple’s rates of $.55 per ACH transaction and 2.28% + $.24 for a qualified credit card transaction, you would prefer ACH if your average ticket is less than $14.00. This is a very low break-even point which might drive you and most business owners to prefer ACH over credit cards.

But it can’t be that easy, right? The next criteria we look at and question we ask is “How strong is your relationship with your customers and what other options do your customers have?” If you own a childcare center and have a waiting list for students to get into your school, I would say that you have a very strong relationship with your customer and you should require ACH. However, if you own a Web Hosting company and the customer has dozens of other options, then I would recommend you offer your customers as many payment options as possible to avoid lost sales.

Another thought to consider is the net revenue gained by offering credit cards as a payment alternative, despite the additional cost. In addition to the potential of losing sales by not accepting credit cards, Visa will also tell you that your average ticket will be higher if you accept credit cards. The statistics show that Visa purchases are consistently higher than those made with cash.

Let’s take an example of a typical customer that may spend $40 with your company when paying via ACH, but who may spend $60 when using a credit card. Although your cost for these transactions is $.55 for an ACH and $1.60 for the credit card, your net revenue is almost $18 higher by accepting the payment via credit card.

In summary, if you have a strong customer relationship and a high average sale amount, requiring an ACH debit as payment form may be the way to go. In just about every other situation, you are better off providing your customer with multiple payment options to maximize customer satisfaction and your overall profitability.

Popularity: 12% [?]

Technorati Tags: small business, ACH, eCheck, credit cards, payment alternative, Visa, profitability

Posted by Lisa Hephner

You’ve surely heard it 1000 times before…follow the rules! When it comes to ACH Transactions—transfers of money from your customers’ bank accounts into yours—following the rules for proper authorizations is critical to ensuring that you can defend yourself in the event that one of your customers disputes a charge.

The good new is that with ACH, unlike with credit cards, as long as you have the proper authorization you will prevail.

There are only three reasons an ACH transaction can be disputed:
1. It was not authorized by the account holder
2. It was for an amount different that the amount authorized by the account holder
3. It was executed on a date prior to the date authorized by the account holder

In order to dispute a charge, the account holder must file a signed complaint with his/her bank that states, under penalty of perjury, that at least one of the above conditions is true.

Disputes around amount and transaction date are generally clear cut. Where merchants typically find themselves with problems is understanding and obtaining proper authorization for the ACH transactions they process.

NACHA, the organization governing all ACH transactions, has created a number of transaction types and authorization processes around each one that are commensurate with the risk associated with each type. Thus, there are more onerous requirements for processing transactions authorized over the phone than for electronically processing paper checks. These authorization processes are designed to protect both the business and the consumer, and have resulted in ACH being more secure for both parties than traditional paper check processing—as a consumer’s account information actually passes through fewer hands with ACH.

The following are the most common ACH transaction types (or entry classes, to use NACHA’s language) used by small businesses:

• PPD—written permission for the ach debit required (a paper check does not constitute written permission for a PPD transaction)

• TEL—permission given over the phone, requires specific authorization language that is recorded or is emailed/faxed/mailed before the transaction is processed

• WEB—permission given over the web, requires specific authorization language that is actively acknowledged by the customer

• ARC and BOC—paper checks converted to ACH, requires notice to customers that checks may be converted

The key to processing properly is to submit the transaction using the entry class for which you have authorization. If you do not, and the transaction is disputed, you will not be able to defend the transaction. For example, if you have a paper check that a customer mailed to you, but you processed the transaction as PPD instead of as ARC, and the customer disputes the charge, the customer will get his money back—even though he sent you a perfectly valid check.

If your head is now spinning, and you’re more confused than ever about ACH payment processing, take a deep breath and relax—not only can your payment processing system help you navigate the maze, it can even prevent you from making potentially costly mistakes.

This was not always the case—in fact, many older systems are actually designed in a way that puts your business at risk, because they assigning a single entry class to all of your transactions. The best new systems, like PaySimple Solution 2.0, not only enable you to process multiple transaction entry classes they also include programming that actually prevents you from selecting the wrong one, as well as features that make using appropriate authorization language automatic.

A few examples from PaySimple 2.0:

• All ACH payments processed from a PaySimple web payment forms are automatically coded WEB by the system.

• NACHA rules prohibit authorizing recurring payment schedules over the phone, thus TEL is not an option on the PaySimple recurring payment entry page.

• Email receipts contain required NACHA language based on entry class selected

Web payment forms automatically include NACHA required components

Additionally, PaySimple provides authorization form and telephone script samples, suggested invoice and office signage language, training materials for your staff, and education materials for your customers—to help all involved easily and comfortably transition to ACH processing.

Ultimately, it’s up to the business to ensure that proper authorizations are obtained for all transactions. But that doesn’t mean that technology can’t make it easier. So, as a small business owner, take a look at the ACH payment processing system you are using and ask yourself:

• Is it helping my business operate more efficiently?

• Does it help me avoid common mistakes and pitfalls?

• Do its limitations put my business at risk?

If you don’t like the answers, its time to upgrade—properly implemented ACH payment processing is a win-win for both your business and your customers. Doing it right is easy, with a little help from the right electronic payment processing solution.

Popularity: 14% [?]

Technorati Tags: ACH, credit cards, check, NACHA, payment processing, business, electronic payment

Posted by David Sharp

Have you ever slowed down to ask what comprises the cost of accepting a credit card, better known as the Discount Rate? Why does this cost vary from one transaction to the next? To understand best, I encourage you to step into the shoes of your valued customer, the consumer. The average American carries 4-5 bank issued cards in his or her wallet and utilizes them to finance transactions, expedite the transaction at the point of sale, and in many cases, to take advantage of the benefits these plastic cards give back.

The consumer’s choice as to which card to draw from his or her wallet is generally based upon the answer to one key question…”What’s in it for me?” The list of incentives made available to the consumer by the card issuing banks is extensive. Ranging from signup bonuses and teaser introductory rates to cash back incentives and airline miles, consumers receive tremendous benefit from the issuing banks for their day to day purchases. Financing these incentives sounds like the issuing banks’ problem, right? Not exactly.

The largest component to PaySimple’s competitive discount rate and merchant account is the cost of Interchange, which we collect from you via our discount rate and pay to the issuing banks, in large part to fund the consumer incentives I’ve mentioned. At the end of the day, there is very little that you can do as a small business owner to reduce your cost of credit card acceptance while continuing to satisfy your customers’ need for choice.

Just as you provide a breadth of products and services for your customers to choose from, I would encourage you to provide equal choice to them for their form of payment. The PaySimple Solution accepts all of the major card types and allows for alternative payment methods, such as ACH direct-debit, helping you to minimize your overall cost of payment processing.

By allowing your customers to make payment with the credit card or other remittance type of their choosing, you’re increasing their convenience. You will attract new customers to your business, build customer loyalty, and potentially increase your customers’ average purchase amount. The impact on your net revenue growth will likely offset the variance in Interchange expense and yield maximum growth to your enterprise.

Popularity: 13% [?]

Technorati Tags: credit card, point of sale, signup bonuses, Interchange, small business, customers, ACH, payment processing, net revenue