Trimming costs by $33k per month through a payments stack optimization.
Finance teams are problem solvers by nature. But with all of their creativity and thoroughness, they can only address so many projects at once–there are only so many hours in the day. But for some areas of cost management, gaps in internal expertise can be an even bigger roadblock.
In other words, some important projects simply cannot be “in-sourced.”
One Verisave client, the finance team for a leading manufacturer of medical and dental equipment, supplies, and services, recognized this early on when working to cut processing costs.
The challenge:
Merchants in the medical supply/device manufacturing industries, which sell their products and services almost exclusively to other businesses (B2B), are faced with complex payment systems. These systems involve a wide array of card types, payment methods, and varying transaction sizes, making it difficult to determine if they are optimizing their payments costs effectively.
In this case, the finance team had seen strong indications that they were not getting the best possible rates on processing fees. They recognized several inefficiencies in their electronic payments practices, and they knew that their merchant account set up was likely out of date.
The challenge was two-fold. How would they find time to dig into these numbers? And how would they access the critical benchmarking data to compare their rates against optimized accounts with similar profiles?
The solution:
To address this challenge, the finance team reached out to Verisave to conduct a comprehensive analysis of their credit card processing fees. The analysis took into account several factors, including the types of cards used, transaction sizes, payment methods, and processing patterns. Through this detailed review, Verisave was able to identify gaps in the way transactions were being processed, which were contributing to unnecessarily high fees.
Verisave worked closely with the finance team to implement changes in their payment infrastructure. This involved updating their payment stack through an enterprise resource planning (ERP) system change, which allowed for better management and reduction of hard costs associated with payment acceptance.
Quick Facts:
- Beginning Overall Effective Rate: 2.65%
(Overall Effective Rate is the percentage of a transaction total that gets charged as a processing fee) - Target Overall Effective Rate: 2.56%
- Account Areas Affected: 2
- Total Monthly Cost Reduction: $33,000
The outcome:
By refining their payment practices and addressing inefficiencies in their payment processing stack, this finance team was able to realize a substantial cost savings. The team saw a noticeable reduction in its overall costs, with an estimated monthly savings of over $33,000. Additionally, the overall effective rate dropped from 2.65% to a much more competitive 2.56%.
The partnership with Verisave not only helped the client’s internal team reduce costs but also enhanced their ability to reinvest those savings. With more efficient payment processing in place, they are now in a stronger financial position, allowing them to rest easy and focus on other strategic initiatives.
If your business is looking to better manage your merchant account or reduce fees, we’re here to help. We fix and monitor your existing merchant account, and we bring that money back to you. No need to change processors or add a project to your team’s already hectic workload. Schedule a consultation today.
Verisave is a third-party cost-reduction firm specializing in merchant accounts and credit card processing fees.
Verisave is not a payment processor, and is not affiliated with any processors, card brands, or banks.
Verisave has more than 20 years of experience optimizing and monitoring the credit card processing industry.