Fixing Problems for Giorgio Bergamo:
A Case Study For Lowering Payment Processing Fees
With many businesses experiencing a boost in their online sales, it is important to understand what limitations some e-commerce platforms have. Especially now that many businesses have suddenly found their online presence to be more important, it’s easy to fall back on popular platforms without much thought. That’s not a bad or uncommon thing—as a business owner, there are plenty of other things for you to think about.
Your choices of merchant service providers is one of the limitations present on most e-commerce platforms, as they’ll try and route your payments through a payment service provider or an aggregator. Because payment processing isn’t designed to meet every individual business’s needs, those aggregators can cost your business more and cause problems for your business. Aggregators are often quick to set up accounts, but they don’t necessarily come with ideal terms for your business. You can end up paying much more money than needed, finding yourself in a difficult situation.
Let me introduce you to Marc:
Marc sells high-end jewelry and was working with a payment aggregator, recommended through Shopify where his site is hosted. He got his approval in less than 10 minutes and started accepting payments. But just a few weeks later, as his sales volume increased, he found himself looking for a better solution for processing payments). The profile set up for him kept triggering his processor’s fraud detection and they eventually asked him to take his business elsewhere, leaving him and his business on hold for a few crucial days.
We were able to help Marc not only get out of that situation but reduce the rates he was paying for payment processing significantly. Here’s the story as he tells it:
[DPG] Hey Marc!
Can you tell us about your business?
Our company name is MJ Jewelers, and we’re building a brand called Giorgio Bergamo.
How’d you get into that?
So, I’ve been (in the jewelry production space) doing jewelry for over 10 years and my family was doing jewelry before me. It’s in the blood. My family’s business before me was more custom jewelry, which is low value. Great look, but it’s low value – it’s not going to last you forever, but it is what it is.
My brother and I took it to the next level and started doing precious jewelry, precious gems, precious metals.
So, you were running your store through Shopify and ran into some issues?
Yes, I’m still running through Shopify now while looking for other options. Because we deal with high-value orders, our payment processor didn’t know how to handle our company. “This merchant received a $1,000 order and it’s one item. Is it fraudulent? is it not fraudulent? Should we fulfill this transaction or not?”
So, after not too long they kind of kicked me off and said, “You need to find a new service provider.”
And how did that affect you?
It was a huge scramble to figure out the next step. Overnight we were told we didn’t have a way to accept payments from our customers.
How did you find Direct Payments Group?
So, Aviv from DPG and my brother happened to be good friends. My brother said “Aviv can help with this sort of stuff, why don’t you give him a call and see if he can help?” So, I did. And I didn’t sign up with him right away because I found a different merchant account through our bank. I just wanted to stop dealing with headaches. You’re happy to just settle down with somebody, and not think about it.
Aviv helped me look over my account to make sure everything was set up correctly, and I had the right security measures and compliances. And he reviewed some statements to make sure I was getting the best rates possible. Every credit card we take has a different rate, based on region or what the company is or even what type of card. Rewards cards or cashback or mileage. Every card has intricacies on what they charge our business, which I didn’t know.
So Aviv analyzed all of my transactions, and what kind of cards they were coming from, what percentages I was being charged. I switched over because I was happy with his analytics, and he put me on a plan no one had offered me before. When I signed up directly with a bank, they just said “You’re on this plan. You’re doing this amount of volume, you’re getting this tier. We’re gonna lump sum the transactions as an average.”
Aviv said, “I don’t like this. I think you can apply for a lower rate overall based on what I’m looking at. If you go with me on this plan, we’ll break down every card and process it separately. It doesn’t cost me anything extra.” It’s simpler. I read my statements, it all looks the same on my end. This is my breakdown, this is how much I’m saving.
Everyone walks away happy.
What’s the biggest impact it’s had on you? Just cleaning up the math?
It’s not so much the numbers, it’s the expense. I have to think, when I’m marking things up, how much it’s going to cost me. I’m paying a fee in every direction, even advertising. So the smallest percent can impact my product by a lot. He lowered my costs by categorizing and differentiating my plan from before.
Aviv took down a 4% average rate to under 2.5%.
Would you recommend Direct Payment Group?
Definitely. 2 reasons: Aviv likes the math, he does his due diligence. Second, he answers me right away when I need something. No chase. Everything is straightforward.
How We Helped Marc
When assessing Marc’s situation, we looked at the business like any underwriter would when reviewing long-term merchant accounts. We looked over their terms and conditions, return policy, and compliance levels. Ensuring that all of these elements were in line with Marc’s needs required two things: the ability to recognize what we can change, and the ability to recognize Marc’s needs.
When we submitted the application, it was much the same. We offered as much context on the business and its trends so the underwriters could make an informed decision. Giving them a better understanding of Marc’s business allowed them to work with Marc and find agreeable terms. Unlike higher scale solutions that didn’t know what Marc was doing, our solution accounted for his higher ticket sales. With that information, they won’t suddenly shut down his account.
How Your Business Is Like Marc's
While Marc’s situation came up because of the aforementioned high ticket sales, he’s not alone in having issues. Even if you aren’t doing four-digit sales, you always run the risk of similar difficulties with payment aggregators. Accounts can have issues because of volume, a series of refunds, or a plethora of other unique situations. Every business has individual factors that need to be considered.
Even if you aren’t worried about your account getting shut down, you can still see how you are often paying too much in fees. Small percentages of each sale can add up very quickly. Looking at your books, how much money would an extra 2% of your sales be? It would have a pretty significant impact on you, wouldn’t it?
At Direct Payment Group, we’re passionate about helping you to find the ideal payment processing. We understand how detrimental these issues and fees can be to your business. Because so many business owners gloss over them, it can be a shock to the system when payment issues come up. Don’t let yourself be surprised—get in touch with us today to find out how much you can save or to get an answer to any questions you have.
Know someone that owns a business and may find this information useful? Share it!