Avoidable Credit Card Fees for Your Small Business
Running a business requires you to accept credit cards. After all, this is now considered the most popular payment option accepted today. If you want to keep your customers happy and shopping with you, taking their plastic payment is essential. The most frustrating part of accepting credit cards for most business owners is the fees associated with accepting these payments.
The good news is that 60 to 85 percent of these fees and charges can be avoided by making a few changes to your credit card acceptance policies. After all, with companies such as MasterCard and Visa having more than tripled their swipe fees in the past 10 years, it has made it essential for businesses to find ways to minimize the costs and fees they incur.
Negotiate with the Credit Card Processors
One of the best ways to avoid fees is to negotiate the rate with your payment processors. You can negotiate with the processors by leveraging the volume of transactions you have. This is because the more that you are able to sell, the more transactions you will perform and the more value that it will add for the processor.
Just like any other business, processors can negotiate with the suppliers. The more you give them, the more they will be able to negotiate, lowering their overhead and in turn lowering your rates – if it is a worthwhile move.
There are a number of different fees that can be negotiated related to your credit card processing. In many cases, if it seems worthwhile to the company, they can be avoided altogether. A list of these fees is found here.
- The terminal lease fee
- PCI Compliance
- IRS reporting fee
- Statement fee (considering going paperless, which may eliminate this completely)
- Monthly fee (in many cases this will cover some of the smaller fees here – be sure you are not paying twice)
- Minimum monthly processing fee
- Contract cancellation
- Marked up discount rate
- Payment Gateway fees
Ask a Professional
If you are like most small business owners, you likely do not know very much about credit card processing. In order to get a better understanding, you need to have an advocate on your side, helping you debunk any processing myths you may here. Their relationship and knowledge with the processors can help you get much lower rates for your business.
A secret that many business owners are surprised to hear is regardless of the size or the volume of their transactions, almost all credit card processors purchase their rates right from MasterCard, Discover and Visa. This also means that they have the ability to resell the rates at the precise rate to various businesses.
When you have “insider” information such as this, it can help provide you with an edge when working with vendors – for example, as leverage for attracting lower rates.
Too many business owners believe that in order to see any savings, they must keep switching their credit card processing provider. This is simply not true and a little savvy negotiation can help you avoid a number of fees, while lowering others.
If you would like more information on credit card processing and the fees that you can negotiate or avoid, contact us today at 866-944-3244 or visit us online.
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