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.