Transparent Financial Services (TransFS.com), a marketplace for businesses seeking financial services, noted that small retailers may overpay an estimated $73 million for credit card processing during an already tight holiday season.
As a result of weak predicted sales, retailers are looking to cut operating costs as much as possible in order to maximize revenue.
The National Retail Federation (NRF) predicted at least a 1% drop in retail sales for the holiday season due to continued consumer uncertainty regarding job security and housing values. The American Research Group predicts sales to drop between 2.5%-4.5%.
One area where retailers can easily cut costs is payment processing. An analysis of TransFS visitors shows that retailers are expected to overpay for credit card processing by more than $73 million in December alone.
TransFS helps retailers cut processing costs with comparison shopping for credit card processors. Retailers go through a simple auction process and in minutes receive highly competitive bids from top quality processors who can save them an average of 42% on current processing costs. These savings represent almost a quarter of the estimated drop in revenue that is expected due to the sluggish economy.
The smallest retailers often get the worst deal on credit card processing and have the best opportunity to save by getting a better deal. Bookworm, a bookstore in Edwards, Colo. (population 10,000) is another TransFS customer.
By having processors bid for their business on TransFS, Bookworm to cut 0.60% from its processing costs, saving around $5,000 per year. “As an independent local business we knew in a tighter economy we needed to save on some of the necessities of running our business,” said Nicole Magistro, an owner of Bookworm. “We had tried shopping around credit card processing before and it was always a big time drain and hard to compare the various rates. Especially during the holidays when we are incredibly busy, we don’t have the time to spend comparison shopping. TransFS gave us some great options for credit card processors, saved us a lot of money and made it really easy, saving us time.”