How to Negotiate Your EFTPOS Terminal Fees by Joe Cignetti

Negotiating your EFTPOS (Electronic Funds Transfer at Point of Sale) terminal fees is an essential strategy to manage and reduce your business expenses. Given the competitiveness of the financial services industry, you have ample leverage to negotiate better terms. Here’s a comprehensive guide to help you navigate this process effectively. 

1. Understand Your Current Fees

Review Statements

The first step in negotiating your EFTPOS terminal fees is to understand your current fee structure. This involves reviewing your monthly statements. Pay attention to:

• Transaction Fees: These are fees charged per transaction, often a percentage of the transaction amount or a fixed fee.
• Monthly Fees: Regular fees for maintaining the EFTPOS service.
• Additional Costs: Look for any miscellaneous charges, such as terminal rental fees, chargeback fees, or PCI compliance fees.

Identify High Costs

Highlight any fees that seem particularly high or unexpected. Understanding these fees will provide you with a clear picture of where you can negotiate reductions.

2. Research Competitors

Compare Rates

To negotiate effectively, you need to know what other EFTPOS providers are offering. Compare:

• Transaction Fees: Look at the percentage and fixed fees charged by other providers.
• Monthly Fees: Compare the monthly service charges.
• Additional Benefits: Some providers may offer additional services like fraud protection, faster settlements, or better customer support.

Ask for Quotes

Reach out to multiple EFTPOS providers to get quotes. This can give you leverage when negotiating with your current provider. Ensure you get detailed information on all potential fees and charges.

3. Evaluate Your Transaction Volume

Analyze Transaction Data

Understanding your transaction volume and value is crucial. Gather data on:

• Average Transaction Value: The average amount processed per transaction.
• Total Monthly Transactions: The total number of transactions processed each month.
• Peak Periods: Identify any peak periods where transaction volumes are higher.

4. Prepare Your Case

Show Loyalty

If you’ve been with your provider for a long time, use this as a negotiating point. Providers value long-term relationships and may be more willing to offer discounts to retain your business.

Highlight Competition

Mention the better rates and terms you’ve found with other providers. This can pressure your current provider to match or beat these offers.

5. Contact Your Provider

Schedule a Meeting

Set up a formal meeting or phone call with your provider. Ensure you speak with someone who has the authority to negotiate fees.

Be Direct

Clearly state that you’re looking to lower your EFTPOS fees. Present the research and comparisons you’ve gathered.

Negotiate

Discuss potential reductions in transaction fees, monthly fees, or even the elimination of certain fees. Be prepared to negotiate on several fronts and to ask for specific reductions.

6. Consider Long-Term Contracts

Negotiate Terms

Sometimes, committing to a longer-term contract can help reduce fees. Providers may offer lower rates in exchange for your commitment.

Understand Conditions

Ensure you fully understand the terms and conditions before signing a long-term agreement. Be aware of any early termination fees or conditions that might affect your business.

7. Leverage Other Relationships

Group Negotiation

If you are part of a business association or a franchise, sometimes negotiating as a group can lead to better rates. Group purchasing power can be a significant leverage point.

8. Review and Monitor

Regular Reviews

Periodically review your EFTPOS fees to ensure they remain competitive. The financial services industry is dynamic, and better deals may become available.

Stay Informed

Keep abreast of any changes in the market or new providers that could offer better rates. Subscribe to industry newsletters, attend relevant seminars, and network with other business owners.

9. Seek Professional Advice

Consult Experts

If negotiating fees seems overwhelming, consider hiring a consultant or advisor who specializes in merchant services. These professionals can provide valuable insights and negotiation strategies.

Example Negotiation Script

Here’s a sample script to use when contacting your provider:

“Hello, [Provider’s Name],

I’ve been reviewing my EFTPOS terminal fees and noticed that the transaction fees and monthly charges are higher than expected. Given my long-term relationship with your company and the competitive rates I’ve found with other providers, I am requesting a review of my current fee structure.

I believe that with my current transaction volume and our history, we can come to an agreement that benefits both parties. Could we schedule a meeting to discuss this further?

Thank you, [Your Name]”

Conclusion

By being prepared and having a clear understanding of your current costs and what you want to achieve, you can negotiate more effectively and potentially reduce your EFTPOS terminal fees. Regularly reviewing and negotiating your fees is a proactive approach to managing your business expenses and ensuring you are getting the best value from your service providers.