Clever Ways to Save Money on Credit Card Processing Fees

Electronic payment methods provide a safer way for business owners to collect payments from consumers. When a payment is made with a credit card or a debit card, a merchant will incur a variety of costs per transaction. Valued Merchant Services has shared several clever ways to save money on credit card processing fees.

About Credit Card Processing Fees

Some business owners are unaware of the potential savings on credit card processing fees. A merchant might have a fee structure that features variable rates, tiered pricing or a flat-rate plan.

Additional costs, such as the monthly fees, annual fees, non-compliance fees, equipment fees, assessment fees and interchange-plus markup fees may be included within a company’s credit card processing fees.

Understand the Company’s Current Situation

Before a business owner can perform an apples-to-apples comparison of credit card processing fees, an internal review should be completed.

Knowing which numbers matter for search-related purposes can help a merchant obtain a more accurate quote.

Shown below are some of the items that a merchant should have when shopping for lower credit card processing fees.

  • Number of monthly sales
  • Average ticket price
  • Equipment purchase or leasing costs
  • Monthly service fees
  • Annual fees
  • Noncompliance fees
  • Chargeback costs
  • Rate plan / type

Request Lower Rates From Existing Credit Card Processing Company

A merchant who has received several years of credit card processing services from the same company may be able to negotiate lower costs.

Speaking with an account rep about recent pricing incentives could lead to lower credit card processing costs.

While there is no guarantee that an existing merchant services company will be able to provide lower fees, it may be worth asking to see if there is any flexibility for lower rates.

Maintain PCI Compliance

The Payment Card Industry Data Security Standard encourages merchants to follow specific procedures to secure sensitive credit card information.

Merchants who fail to maintain PCI compliance may begin to receive monthly fees for noncompliance between $9.99 – $149.99 or more. They may also be billed an annual PCI compliance fee which may be negotiable

While federal law in the U.S. does not require merchants to maintain PCI compliance, penalties that exceed $5,000 per month may be assessed for noncompliance.

Following the PCI DSS rules will help merchants save money on credit card processing fees and provide greater protection for their customers.

Suggest Debit Card Payments

Debit cards will generally have lower processing costs versus credit cards. Posting signs that mention “debit cards” are accepted here might entice shoppers to use their debit cards more frequently than credit cards.

Set a Minimum Threshold for a Credit Card Payment

A merchant could lose money on high-volume sales of certain low-ticket items. For instance, if a shopper wants to use a credit card to purchase an item that costs $2.50, a merchant who pays a percentage of the item’s cost, plus 25-30 cents could realize reduced profits.

This could impact businesses, such as a coffee shop or a convenience store, where an enormous amount of beverage-only sales occur.

Purchase Credit Card Processing Equipment

To keep their expenses low, many startup businesses may opt for leased equipment versus buying credit card processing equipment. However, if a merchant’s budget will not be impacted by purchasing new equipment, he could save money in the long run.

Inquire About Bundled Credit Card Processing Rates

Established businesses may be eligible for lower processing costs via a bundled rate plan. If the average ticket size reflects that a merchant has consistent price points, she might be able to save money on credit card processing fees.

Consider Cash Discounting or Surcharging

Businesses no have the option to raise their prices for non cash payments and offer a discount for cash paying customers or to add a surcharge to cover some or all of their processing fee costs. As consumers become more accustomed to these programs it will allow the business owner to virtually eliminate the cost of processing credit cards by passing along those costs to the consumer during the transaction.

Speak With a Credit Card Processing Expert

The landscape of merchant processing companies and the costs that are involved may be confusing for some business owners.

Verbal agreements are unenforceable. Therefore, a business owner should get any agreed upon terms in writing.

Speaking with a credit card processing expert from a firm with a stellar reputation is highly recommended.

Contact Valued Merchant Services today for information about low-cost payment processing services.

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