Although the Mafia was guilty of wrongfully extorting money from hundreds of individuals back in their heyday, credit card companies are actually doing the same thing by charging merchants excessive credit card process fees. For smaller businesses, this is a costly hassle since most consumers prefer to pay by credit card whether they are shopping offline or online. So the acceptance of credit cards is vital to small businesses. Unfortunately, those processing fees eat away at a company’s profits.
In order to reduce your credit card processing fees, you need to figure out what is causing them to be so high. In most cases, a company representative should be able to help you with this. However, there are three ways that a small business can reduce those processing fees:
• Compare the amount of your processing fees – You should ask your credit card company representative for a “concession” if you are paying over 2% for processing fees. If that figure exceeds 3%, then start shopping around for another credit card processing company to use. Giving away 3% of your sales revenue is unacceptable and the sooner you correct the issue, the better off your small business will be.
• Examine and compare several statements that you have received from your credit card processing company over the past 5 or 6 months – If you notice that there are a lot of chargebacks on those statements, you need to inquire as to why this is happening. Speak with a company representative and ask what you can do to prevent these in the future. In most cases, these chargebacks result when the consumer does not recognize the transaction appearing on their credit card statement.
• Start shopping around for a different credit card processing company in order to get a better percentage rate – There are several options to explore when shopping around for another company to satisfy the needs of your business. If you are a franchisee, you should check with your corporate headquarters to see if you can get a better card processing percentage rate. Additionally and instead of going through a middleman, go directly to a larger processing company so you can eliminate those excess fees.
There are a number of other ways that you can reduce the amount of credit card processing fees that you are incurring every month. Finally, consider promoting those transactions that have a lower cost attached to your customers to start saving money immediately.