An often hidden part of the world economy revolves around the massive amount of funds that trade hands via remittances every year. The World Bank reported in 2019 that the rough estimate of the total amount of funds in dollars that were sent via remittances to low and middle income countries touched about $550 billion that year alone. We know that the number came down a little in 2020 given the COVID-19 pandemic, but it is still clear that billions of dollars move through this system every couple of days.
High exchange fees are a frustrating aspect of remittances that most would like to do away with. Estimates show that the average transaction cost of remittance of just $200 is about $14 or roughly 7% of that transaction. This means that an incredibly large sum of money simply falls down the rabbit hole into the pockets of third-party transaction services.
The solution to this issue may reside with Bitcoin and other cryptocurrencies. These currencies can be exchanged from one crypto wallet to another with minimal transaction costs or friction. Parties can receive their funds much faster and with far fewer fees. The only roadblock to this more desirable future is hesitation by the public and by some governments to accept cryptocurrencies as a functional part of the economic fabric of this planet.
It has been a long journey for Bitcoin and its counterparts to start to gain traction with the public as an accepted form of currency. It still makes up just a small portion of the total transactions conducted throughout the world daily, but it has picked up some valuable allies as it continues the fight to gain acceptance. Brands such as PayPal and Xbox have stated that they will accept Bitcoin payments. Business Insider event reports that popular fast-food chains in certain parts of the world are getting on board as well:
Restaurant Brands International is one of the world’s largest fast-food holding companies. It is the parent company of Burger King, Tim Hortons, and Popeyes.
Last year, Burger King Venezuela announced it would begin accepting bitcoin and other cryptocurrencies. It collaborated with Cryptobuyer, a platform that generates conversion of cryptocurrencies to normal currency
What this means is that even large merchants such as these household names see the legitimacy of Bitcoin and want to get in on the potential to add additional customers to their base. They believe that acceptance of Bitcoin is the way to do just that. Lower transaction fees make it worth their while, but the volatility of the price of Bitcoin is certainly a risk that everyone must consider. Additionally, the looming danger of excessive government regulation is another factor to keep in mind when considering why more merchants haven’t begun to accept the currency.
All of this said, the future looks incredibly bright for Bitcoin and others particularly for individual users of these currencies. Circumventing some of the most frustrating and immovable aspects of the global economy is one of the biggest accomplishments that these currencies can already put under their belt. Look for more milestones as time goes on.
Industry experience. Do they have a proven track record in the payments processing industry? Check out reviews on the company from neutral third-party sources as well as current customers.
They are tailored to your industry. Every business has different needs depending on the industry. It’s critical to choose a payments provider with experience in your line of business so they can advise you on payment solutions that are the best fit and can help you grow.
Commitment to data security. Data security should always be a top priority. Tools that help you detect and protect against fraud by securing card data are essential. These offerings should be integrated with your processing if possible. And, in the case of many small businesses, security tools should be bundled simply and smartly to take the work off of you and your business.
Customer support. You may need support and training when you’re getting up and running, when systems change, and at any other time you may need help. Look for a processor that offers live 24/7 customer support to help keep your business running at all times.
There will always be some degree of risk associated with handling and transmitting sensitive data, so processing credit cards with a reputable payment processor is vital. Above and beyond securing your computers, terminals, and networks, there are several additional security measures you can implement to boost your security. A reputable payment processor can discuss your options in detail.
Most types of merchant businesses qualify for a merchant account. The application process may vary depending on your business type and the associated risk assigned by credit card networks.
The cost of accepting credit cards varies greatly. When you sign a contract with your payment processor, make sure you pay attention to how and what fees will be assessed. You’ll likely be responsible for interchange fees assessed by the card networks, various processing fees, and other additional fees depending on the services offered. Make sure you understand the fees you’ll be assessed before you sign your contract. And, ask questions. You may be able to negotiable a lower rate.
At the minimum, you should set up your business to accept traditional magnetic stripe cards, EMV chip cards, and eWallets. It would also be best to consider whether you need to accept payments on the go, online or over the phone. Depending on your customer base, you may also want to consider accepting secure check payments.
There are many options in POS terminals. The type of terminal you select depends mainly upon the payments options you want to accept and where and how you need to accept those payments. For example, if you only accept payments from a physical location, a countertop model may be the best option. On the other hand, if you accept payments offsite, such as trade shows, festivals or farmers’ markets, a mobile POS system may be the way to go. For phone payments, you may want to discuss a virtual terminal.
The answer to this question depends on various factors, including your agreement with your merchant processing services provider, how often you send your authorized transactions for settlement, and the financial institution you use. Make sure you understand this timeline at your contract signing so that you aren’t caught low on funds. Today, there are faster paths to funding than ever before.
There is a lot of variation here. Chances are if you’re a small business with only one location and a terminal, this process will be a bit quicker. However, if you’re a larger business with many locations and terminals, your ramp-up time may take longer. Also, you may be able to set up payment processing more quickly if you choose a mobile processing application versus a traditional countertop POS system.
Knowing that your payments processor is there to support you 24/7 is critical to the success of your business. For example, if your POS system or network goes down during a peak business time, you can’t afford to miss out on those sales. So make sure you understand how much support a processor provides before you sign your processing contract.
Some processing contracts include an “early termination” clause, and some do not. In some cases, you may be assessed a fee if you end your agreement early, while other processors may waive such fees. If you think there’s a chance that you’ll need to end your credit card processing early, make sure you check the contract carefully before you lock into an agreement.