Credit card processing fees are one of those costs of doing business you can’t seem to avoid. People love paying with plastic, especially since they aren’t the ones seeing the fees, but every time that card enters your terminal a little money goes off to pay someone else.
Fortunately, credit processing fees aren’t all set in stone. AmEx doesn’t like to budge, but you can find some wiggle room with the other companies.
1. Buy Your Terminal
Over the long run, buying is always cheaper than leasing, and that’s even accounting for the occasional upgrade. A good terminal doesn’t really cost that much, and while a top-quality model might ask for four figures, a basic terminal with a chip reader can cost between $200 and $500.
2. Shop Around
A basic mistake too many merchants make is to take the easy way out and sign up with the merchant processing company that has the flashiest ads or the most misleading numbers. Processing fees can add up to a lot over time, so make sure you put in the work early, read all the fine print you can get your hands on, and figure out which company has the best deal for your business.
Your fees are not set in stone. Even if you sign a contract, you can always renegotiate. Bargaining is something of a lost art in America, but if you don’t like your fees and can find a better deal with a different processor, consider talking to your current provider and find out whether they can review your rates and offer more competitive numbers.
4. Accept Debit
A lot of people use debit cards instead of credit, and while you can run a debit card as credit thanks to their credit card sponsor, that might not be your best bet for business. The fee for cards run as credit is a percentage of the transaction, but cards run as debit have a flat fee instead. That makes it especially important for businesses that sell expensive products to accept debit cards.
5. Fixed Rates, No Bundles
Be sure to lock in your rates early and make sure they won’t be going anywhere soon. Merchant processors tend to offer good rates at first thanks to the strong competition for new merchants, and you’ll want to lock in those rates for as long as possible. At the same time, while a bundled rate option might sound simple and convenient, that’s only the case for established businesses with consistent month-to-month income. If you’re a new business with no payment history or you get your payments irregularly, avoid bundles.
Processing fees might be unavoidable, especially for some businesses, but that doesn’t mean they have to be high. Put some thought into choosing the right merchant processor and your fees will be as painless as possible.
Posted in credit card processing on May 16, 2017