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The coronavirus pandemic has presented the construction industry with a number of economic and logistical challenges. In these trying times, it’s more crucial than ever for construction professionals to adapt to changes while keeping their operational costs low.

As the shutdown of many physical operations are pushing more payments online, businesses need to look for ways to accept credit card payments without incurring the hefty interchange fees imposed by card companies. Even before the pandemic, costs tied to accepting credit cards were among the highest that American merchants faced, second only to payroll. Merchants spend more than $100 billion every year to accept card payments and generally view them as inescapable.

Since the beginning of the pandemic, an analysis of CardX transaction data revealed that consumers are relying even more on their credit cards during these uncertain times, growing the demand for merchants to accept card payments. The study also showed that the amount of each card transaction tends to be higher, which only drives up processing costs for businesses. In this volatile market, construction professionals may find themselves especially conflicted between trying to keep costs low and meeting consumers’ demands to use their cards.

How can construction businesses strike this balance?

Surcharging is an increasingly popular business solution that enables construction businesses to accept credit cards and offset transaction costs. First introduced in 2013, surcharging allows merchants to compliantly pass on interchange fees for customers who prefer to pay with credit cards for the rewards or the convenience. Customers are still always presented with zero-cost payment options, including debit, cash or check.

As construction businesses often have high average tickets and low gross margins, surcharging can be an extremely beneficial alternative. By implementing surcharging, contractors and other businesses can add up to 3.5% back to their bottom lines. For a construction business with EBIT margins around 7%, that’s half of a sale’s profits. Those that already accept credit cards no longer have to raise prices for all customers to keep the service affordable. And businesses that currently don't offer a credit card payment option can add it without hurting their bottom lines.

Despite all these benefits, many businesses are intimidated by the long list of rules set by card brands such as Visa and Mastercard, and have held off from adopting surcharging due to the compliance overhead. It can be daunting to parse through the legal technicalities of surcharging compliantly—a problem exacerbated by the fact that standards vary from state to state.

Finding a reliable surcharging solution

Fortunately, there are payment solution providers who can help construction professionals get up to speed on surcharging and make the transition painless and hassle-free. Contractors should seek technology providers that handle all the compliance details for surcharging, so businesses don’t have to worry about navigating the rules themselves.

As COVID-19 has pushed many payments online, construction businesses should also look for surcharging services delivered via standalone checkout pages, or those that can be seamlessly integrated into their existing websites. This will allow construction professionals to offer their customers a smooth digital experience and conduct business virtually, while providing customer-friendly payment options and cutting down on expensive card interchange fees.

Given today's uncertain economic climate, it’s more vital than ever for construction professionals to find ways to minimize costs while answering customers' needs, safeguarding profits and elevating their competitive profiles.
Through surcharging, businesses can offer the credit card option without the cost, placing themselves in a strong position to succeed during this crisis and beyond.

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