Most of today’s generation of consumers prefer to pay via credit or debit card for purchasing goods or services. Its convenience is the primary benefit when managing personal and business finance. There’s no longer a need to bring wads of cash whenever they go shopping or clubbing. Moreover, their credit scores get a boost as long as they are consistent with their payments.
As a merchant, you must keep up with the times and partner with card processing suppliers to process this type of payment method, though it can be overwhelming to think about the hefty charges that may entail this service. However, there are ways to curb the fees and keep them at a minimum.
Here are ways to save money with credit card processing:
1. Research First
As with every aspect of your business, it’s wise to do your research on potential card processing suppliers first before you settle for the one that you think offers the best features and pricing for your business. You can check websites which allows you to view various quotes and packages from different providers based on the business details that you enter.
If you can, request for interchange-plus price quotes from potential suppliers since this model is more consistent across industries and providers than tiered pricing. This package gives you a glimpse of the processor’s markup along with the networks’ interchange rates.
2. Talk with Your Provider
While a processor’s quote is more or less fixed when you receive it, there’s still a chance that you can negotiate the terms to find out if you can lower the fees and other rates. Most providers can work within your budget and cater to your company’s needs. You can use your transaction volume as leverage since this adds more value to the supplier by processing many transactions.
Determine the fees that the processor charges, such as:
Account Maintenance Fee
This recurring fee, either monthly or annually, serves as a payment for keeping your account active.
Minimum Processing Volume Fee
Some card processing suppliers set a specific transaction quota each month and charge you a fee if you don’t reach it.
Terminal Rental Fee
You’ll be charged monthly or annually for the rental of your card processing equipment like terminal and other gadgets. It’s better to buy them instead and pay for them once.
Check if the provider charges for transaction investigations concerning a dispute filed by the customer.
If the customer wins the dispute and a refund is involved, you may be charged with this amount.
Batch Payment Processing Fee
Credit card transactions are processed by group, and your supplier may impose a small fee for this service.
3. Practice Secure Payment Habits
Reducing the risk of credit card fraud by ensuring that your company’s payment transactions are secure can save you money on processing fees. This is because you won’t be perceived as a security risk for processors.
You can start by letting the customers insert their card instead of having your employees do it and avoid keying in their card number manually as much as possible. Also, forego the swipe function of the terminal and use the chip reader to stay EMV-compliant. You help your customers increase their credit score without compromising their data’s safety.
4. Choose the Right Processor
Depending on your business’ transaction volume, you have to choose the best processing equipment that will give you a higher profit margin. You must consider your monthly sales amount and your average ticket size.
These are the two types of processors you can choose from:
This is best for businesses that process less than 3,000 USD per month or if you have an average ticket size of 10 USD because it doesn’t charge additional fees. While the rates for this processor may be higher than its counterpart, you’ll save money in the long run through the overall cost.
For companies that process more than 3,000 USD monthly, it may be better to opt for standard payment processors. However, the terms for this pricing model are less transparent, so you should talk with your provider and ask for the specifics.
Also, set a minimum amount that’s eligible for card transactions in your store. It’s not practical to have your customers use their credit card for an item that costs 5 USD with the processor taking 0.30 USD per transaction.
To save money on credit card processing, you must set up your account and equipment properly at the start. This means doing your research first and comparing the prices of different suppliers, as well as choosing the right processor. Talk with them about your needs and budget. Moreover, show them that you can provide value to their business by practicing secure payment habits and staying EMV-compliant.