For businesses to be successful in today’s electronic age, it’s necessary to accept credit card payments. Unlike cash, credit card payments cut into the profitability of a sale. This often leaves businesses wondering what they can do to keep their fees as low as possible. It’s not practical to only accept cash, but there are steps you can take to save money on your credit card processing fees.
Using your bank to process credit card transactions may seem easy and convenient, but it’s likely that you’re paying higher fees than if you were to go with a third party merchant service provider. Here are a few tips and tricks that can help save you money on your credit card transaction fees:
Business size
In general, the bigger your business and the more sales you bring in, the more room you have to negotiate fees. However, this doesn’t mean that small to mid-sized businesses can’t negotiate lower fees as well. For smaller businesses, understanding how your fees are being accrued can help you figure out ways to lower your credit card processing fees. Ask your merchant service provider if it’s possible for your fees to be bundled at the end of the month instead of per transaction. This will leave you with more cash throughout the month.
Types of cards
Typically, qualified credit cards have the lowest fees. These are generic cards without any of the extra bells and whistles. You’ll usually accrue higher fees from non-qualified or mid-qualified cards. These include corporate cards, government-issued cards and cards with rewards programs.
Rate evaluations
A good merchant service provider will offer you a monthly statement that breaks down your fees for the month. If your credit card sales have increased significantly since the time you opened your merchant account, you may be eligible for a rate evaluation. All you need to do is contact your merchant service provider and ask them to review your activity. Doing this may result in your merchant service provider lowering your rates.
Swipe the card whenever possible
Have you ever been to a store that will re-swipe your card multiple times if it doesn’t take the first time instead of entering your card number manually? This is because manually-entered transactions incur higher processing rates than if the card is swiped. Whenever possible, swipe credit cards instead of entering them into your system.
If you must manually enter card information, enter everything
When manually entering a card into your system, don’t skip the fields for address, zip code of CVV. Skipping these can cause you to miss out on potential savings. The more information you enter, the more you ensure that you’re getting the lowest possible rate for that transaction.
There’s no way to escape paying credit card transaction fees, but there are steps you can take to make sure you’re getting the best deal. Swipe the cards whenever possible, and if you need to manually enter a card, fill out as many fields as possible. Don’t be afraid to ask your merchant service provider for a rate evaluation. Also, it’s important to understand how the size of your business and the different types of cards can impact your fees. Following these simple steps will help you save as much money as possible.
