Pay Less: Credit Card Merchant FeesAug262024
Credit card processing rates and merchant fees can significantly impact a business's profitability. Fortunately, there are numerous strategies available to reduce these costs. Implementing these measures is easier than you might think. Here are ten tips you can use today to start saving on credit card processing fees.
10 tips to reduce card processing fees:
1. Check your PCI status:
This is your annual security questionnaire (SAQ) and website or IP address scan. When we review statements, we find that 66% of them are paying “PCI Non-Compliance” fee. These are often $19.95 per month, but could be as much as $125.00 per month.
Savings: $480 to $1,500 in merchant fees per year
2. Take Cards on the Go:
If you invoice and key in transactions, consider implementing a mobile payment app. Card-present transactions are more secure, deposit faster, and are cheaper.
Savings: Minimum of 0.30% off the processing rate
3. Take Checking Acct Payments:
if your business sends invoices, or relies on recurring payments, add an ACH option to accept checking accounts for payment. While credit cards take a percentage of each sale, an ACH is typically a flat charge of $0.50 or less. While most clients may still use a credit card, those sales that come in via ACH are practically free.
Savings: average of $2.25 per $1,000 invoice processed
4. Add an ATM:
Small ticket transactions drive up credit card processing fees. Where a business with $100 average ticket pays 1 transaction fee on $100, a business with a $10 average ticket pays 10 transaction fees on the same $100 in sales. Offset this by having an ATM at your location. Instead of paying merchant fees to take small ticket sales, you can earn a withdrawal surcharge.
Savings: go from paying $0.35 to making $2.25 per transaction
5. Use Verification:
If you key in transactions, be sure to always include the address verification (AVS) and CVV code. If you skip them the transaction will still process, but you pay a higher merchant fee than if you enter the info. It also improves security in the event of a disputed transaction
Savings: 0.60% on most credit card rates.
6. Chargeback Notifications:
If your business rarely gets chargebacks, this is particularly important, as it’s easier to miss a dispute. When a customer issues a chargeback, you typically have 15 days to respond, and non-response automatically goes in the cardholder favor. And if you get them via “snail mail” it takes a week to 10 days just to arrive! Your processor should have options for email notification:
Savings: hundreds or even thousands of dollars per occurrence.
7. Interchange Optimization:
If your business sells to other businesses, you know that corporate and purchasing credit cards are some of the highest merchant rate cards you accept. But did you know they can be some of the lowest? The difference is the data that is fed into the transaction. Large corporates have always used interchange optimization tools, but they are now much more available to businesses of all sizes.
Savings: 0.90%, and even more on transactions over $10,000
8. Eliminate redundant fees:
Toward the end of your statement you’ll see your monthly fixed costs. And often times you’ll see redundant merchant fees there. For example, you might see both a “statement fee” and a “monthly service fee”, or multiple security compliance fees. Typically, if you contact your processor and question them, they’ll remove redundant fees.
Savings: $20-100 in merchant fees / month.
9. Call and ask:
Sometimes just calling your processor and asking for a review of your merchant rates and fees will trigger a rate reduction. If you have a good rate already it might not be much, but I’ve seen processors drop fees by hundreds of dollars per month when faced with competition. And, of course, “trust but verify.” Always look at following months’ statements to confirm the savings.
Savings: $0 to $1,000’s of dollars per year.
10. Done For You:
And now for a shameless plug. All these above tips and techniques are part of our basic merchant processing rates and fees analysis, onboarding, and review process. That’s because it’s our job to show you how to reduce the cost of credit card acceptance, as well as to provide ongoing support. If you’re interested in learning more about paying less, click here to schedule a time to discuss.
Savings: ALL THE ABOVE.