Dayspa

SEP 2016

DAYSPA is the business resource for spa & wellness professionals! Each issue covers the latest in skin care, spa treatments, wellness services and management strategies.

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MANAGEMENT WORKSHOP 98 DAYSPA | SEPTEMBER 2016 Pay Pals It's not just cash or card anymore—learn about the pros and cons of various payment processors. By Lisa Starr When it comes to payment, plastic is still king. The use of cash for transactions continues to dwindle: A 2014 study of more than 1,000 consumers by credit card issuing and processing company TSYS revealed that only 9% paid with cash, with 35% preferring credit cards and over 40% debit cards. Plastic has been a constant in purchasing goods and services for so long that many business owners don't give the whole process much thought. But maybe they should: That simple swipe of a credit card in a terminal unleashes a complex set of transactions that involve multiple companies, all of which expect to turn a profi t. If business owners break down the fees they're being charged, they may be in for an unpleas- ant surprise. The payment industry is an area where advances in technology are playing an increasingly important role, and many new options are becoming available for both consumers and businesses. In some instances, a little extra training for support staff is required up front, but beyond that, most of the legwork is behind- the-scenes research and setup, and won't slow down daily business operations. To help you fi gure out your options, DAYSPA sought to analyze the current non-cash payments landscape. Essentially, there are three ways to make and complete transactions: via credit card processors, banking alter- natives and payment alternatives. Below, we've laid out what you need to know about each. CREDIT CARD PROCESSORS Businesses that interact directly with consumers, in- cluding spas, are considered Level 1 merchants, which carry the highest risk level for credit card issuers. This contributes to the additional fees that businesses pay, often up to 5% of the value of a transaction. However, you may not be aware how many companies are tak- ing part in that process and taking a piece of the pie. © GETTY IMAGES

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