How Businesses Can Save on Processing Fees

In this digital, increasingly paperless age more consumers are paying for transactions with plastic rather than cash. Fees for card processing services are unavoidable, but there are ways to reduce them and manage their impact on your profit margins.

In this digital, increasingly paperless age more consumers are paying for transactions with plastic rather than cash. Typical merchant account companies charge up to a total of 5% on card payment transactions (including processing costs, interchange costs, and statement fees). It is a deceptively small percentage that can significantly impact businesses’ bottom lines in certain situations. Fees for card processing services are unavoidable, but there are ways to reduce them and manage their impact on your profit margins.

Set a Minimum Amount for Credit Card Sales

If most of your sales are small amount transactions, it probably is not worth accepting credit card payments for them once you consider the processing fees. A common way to prevent customers from swiping their cards for small purchases is to put up a sign stating a minimum amount. Federal law allows merchants to require a minimum of up to $10.

Swipe for Lower Fees and Higher Security

Transactions in which the cardholder’s information is manually entered incur higher fees than if the card is swiped. Manual entry is less secure against fraudulent purchases, so card processors protect their own interests against the security risks associated with manual entry by charging the higher fee. The magnetic strip found in credit cards contains security features that ultimately give cardholders, card processors, and your business peace of mind during swiped transactions.

Buy Your Own Credit Card Terminal

Many credit card processing companies rent out the terminals you need, which might be convenient for getting things set up and running more quickly. However, continuing to pay rental fees eventually ends up costing more than if you had bought the equipment. Most terminals are available for purchase cost between $100 and $600. So, depending on how much you are paying in rental fees and which terminal you choose to buy, your one-time purchase could be a wise investment in the short and long term.

Negotiate Lower Fees with Your Payment Processor

If you’ve established a good working relationship with your card payment processor and business has been going very well, use it as an opportunity to negotiate lowered fees. They won’t want to risk losing your business if it is a reliable source of revenue and lower fees will help them keep it.

Consult with a Processing Expert

Most business owners are busy enough running their business to spare the time to become experts on credit card processing. That’s why it has become a separate specialized industry with professionals dedicated to understanding the process and educating and assisting business owners with finding ways to get low fees.

 

CardConnect Goldcoast has been a leader in the card payment processing industry for nearly three decades, serving tens of thousands of clients throughout the United States and over 100,000 globally. Contact us today online or by phone (800-823-2131) with any questions about card processing fees and how we can help your business reduce them.

How Interchange Optimization Can Improve B2B Bottom Lines

Interchange optimization is a process that analyzes and evaluates each transaction to determine the lowest appropriate fee to charge for card-based transactions. CardConnect Goldcoast can help Optimize your Bottom Line.

The word “risk” is a constant presence in business, but its role in decision-making has never been more pronounced than it is in today’s globalized economy. Banks are looking for new and more effective ways to protect the money with which they fund merchants, while business owners seek more efficient ways to reduce the risks of disputes or chargebacks in order to realize lower interchange costs and higher profits.

Several studies have shown that accepting credit card payments for goods and services tends to increase sales volume. Implementing card acceptance services has always come at a cost to bottom-line profits but, understandably, business owners would like the cost to be minimal. Enter Interchange Optimization!

Interchange Optimization and Its Benefits

Interchange optimization is a process that analyzes and evaluates each transaction to determine the lowest appropriate fee to charge for card-based transactions. It accounts for the type of card used, how it was processed, and other relevant data. Merchants that accept business credit cards often benefit the most from interchange optimization, as they usually save them between .05% to 1.10% on each transaction. To obtain the best interchange rates, the transaction details need to meet certain criteria, which are set by the card provider.

The Convenience of Interchange Optimization for B2B Merchants
For B2B (business to business) merchants, analyzing and using the data extracted from each card transaction is a complex and time-consuming process. Most merchants simply aren’t equipped to handle it. Interchange optimization provides a convenient and efficient way to process all this information. And with more companies using business cards in recent years, more merchants that accept those cards are reaping the financial benefits that interchange optimization offers.

The Importance of Using a Trusted Interchange Optimization Consultant
A strong interchange optimization consultant helps B2B merchants develop a solution that considers their specific payment acceptance needs. The more personalized the service, the better the end result for your business. Also, using a knowledgeable and experienced consultant to handle your interchange optimization gives you a greater opportunity to enjoy the lowest interchange rates possible. And, as a cherry on top, you’ll free up a significant amount of resources—time, money, labor—that can be allocated elsewhere!

CardConnect Goldcoast has been a leader in the payment processing industry for nearly 3 decades. We serve tens of thousands of clients throughout the United States, and over 100,000, in total, globally. Our payment solutions are known for their security—we’re the trusted provider to several of the world’s top brands—and they’re applicable to any business in any industry. Contact us today online or by phone (800) 823-2131 to learn how your business can take advantage of the best interchange optimization service and pricing in the transaction industry today!