01 May The 3 Biggest Processing Headaches Facing the Construction Industry
The construction industry faces a unique set of challenges. The price of building materials rose 9% in 2018, and that trend is expected to continue. If you’re a contractor, supplier, or developer, your main concern when it comes to processing cards is likely the price tag. Typically, the benefits of accepting credit cards outweigh the cost, but that doesn’t mean there aren’t risks involved.
Keep reading for the 3 biggest processing headaches facing the construction industry. Don’t worry—we’ve got some fixes for you, as well.
1. Rates are sky-high on B2B and B2G transactions
Most contractors and suppliers don’t do much business directly with consumers. That means that any card you accept will likely be for mail orders or over the phone. Unfortunately, business-to-business (B2B) and business-to-government (B2G) transactions can have higher interchange rates for two reasons.
1. Most business cards offer rewards programs. Offering an annual $1,000 travel bonus or 2% cash back on all purchases isn’t cheap, so card associations charge higher interchange to cover their own costs.
2. Card-not-present (CNP) transactions are considered higher risk. If a card is keyed instead of being swiped or dipped, a transaction is generally subject to higher rates. This is because, if a customer is not physically present, the risk of fraud is higher.
The fix: Level II & Level III Rates. Level II and Level III rates are only available for B2B/B2G transactions and offer significant savings. However, additional data must be submitted with every transaction to qualify for these rates. Anywhere from 5 to 19 additional items of data can be required. Manually entering all that extra information just isn’t practical when you already have multiple projects and tasks to juggle. Utilize a virtual terminal that will automatically capture this data and qualify transactions at the lowest possible rate. That means better rates with no extra effort!
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2. Lost chargebacks are cutting into your bottom line
It’s a struggle to find the time and resources to evaluate and implement fraud & chargeback prevention tools. However, if you ship equipment bought with a stolen credit card, you’ll be stuck with the bill when the actual cardholder disputes the purchase. Chargebacks can cost your business thousands of dollars, and that’s not even considering the loss of expensive materials and inventory.
Once a chargeback has been issued, you only have a limited window of time to submit documentation to dispute it.
The fix: Find a processor that will do the legwork for you. Time is one of your most valuable resources when fighting a chargeback. Usually, you’re notified of a disputed transaction by mail. So, how closely and how often do you go through the stacks of mail that your business receives? It’s important to work with a processor that will notify you of disputed transactions quickly and help you through the convoluted process. Otherwise, you might lose a chargeback before you even have the chance to respond.
3. You don’t know how much a job will cost up front
While you most likely conduct an estimate before starting a job, final totals often differ from that initial projection. That’s why most contractors don’t charge the client until the work’s already been done. Unfortunately, if you’re not verifying funds in advance, it’s possible that your client isn’t good for the final ticket amount. Essentially, you’re taking it on faith that they have enough money to pay you once the job’s completed.
The fix: Use authorization holds to validate available funds in advance. Utilize a processing solution that will allow you to place an authorization hold, then settle for the final amount. When you conduct the estimate and pre-authorize the card, you’ll receive an authorization from the bank that sufficient funds are available, and a decline if they’re not. Upon completing a project, the authorization can be settled for an adjusted final amount. Authorization holds on credit cards can last up to 30 days, depending on the issuing bank.
Final Thoughts
Are these 3 headaches afflicting your business? If so, partnering with the right processor can help. You’re busy managing inventory, keeping jobs on schedule, and securing new contracts, so you need a processor that understands the struggles facing your industry and how to overcome them. Make sure you’re receiving personalized service and great customer support. Not sure where to start looking? Give BASYS a call! We’d be happy to take a look at your business’s needs.
BASYS Processing as a business partner
Does your current processor understand the unique struggles of your industry? Do they provide great rates and personal customer service? Are they offering solutions to grow your business and being proactive about helping you reduce risk and increase your savings?
Contact BASYS today to learn more about innovative payment solutions that will save you time and money. We make accepting debit cards and credit cards convenient, safe and affordable.
BASYS Processing features:
• A friendly, live voice will answer the phone when you call; no automated phone systems
• In-house PCI Compliance team to walk you through the process step-by-step, improving security and reducing costs
• Accept payments in person, over the phone or online
• Next-day funding options
About BASYS Processing
BASYS Processing provides credit card and debit card processing services, plus solutions that include terminals, virtual terminals, e-commerce, mobile, and point-of-sale, customized to fit any need. Banks, associations, and software partners depend on us to strengthen their reputations and relationships with their customers by providing remarkable service paired with ultimate flexibility and pricing. Merchants depend on us to make accepting credit cards and debit cards convenient, safe & affordable. BASYS was founded in 2002 on one philosophy: to take care of our merchants, partners, and employees so they never want to leave. We are dedicated to working one-on-one with our customers to design the perfect solution. BASYS is Personal Payment Processing.
Learn more at basyspro.com, and connect with us online at: