How to Reduce Credit Card Processing Fees
Card processing fees make up the largest portion on most business’ monthly statement each month, those tiny looking percentages that add-up to a sizeable amount of money once the volume of transactions is taken into account.
The best way to reduce card processing fees with the minimum hassle is to speak to a reputable card processing expert without delay, especially if you have a high volume of transactions you could be giving money away needlessly as you read this.
In this handy how-to guide with give you an outline of the steps to take to reduce card processing fees that any merchant can follow but this is also a useful introduction to some of the steps a merchant services expert would take to evaluate your current merchant services setup before offering solutions to reduce costs on card processing.
1. Reduce Card Processing Fees with Your Current Provider
One simple way to reduce card fees if you’re trading successfully is to re-negotiate your contract with your current merchant services provider. In most cases this involves leveraging your volume of transactions as a provider will often offer reduced rates for higher volumes of transactions. This is most effective if you have a high volume of sales or your sales have increased but your provider has “overlooked” offering you the lower rate.
Negotiating lower card processing fees with your current provider is a simple fix as it might only take a quick call to your merchant services provider if they are attentive and have good support. However, if your fees are excessively high they might offer only a limited reduction in card processing fees.
2. Increase Security to Reduce Card Processing Fees
Many merchant services providers offer reduced rates on card processing for merchants using advanced security or third-party validation tools such as AVS (Address Verification System) which is used to check the customer card address with the issuing bank helping to reduce risk of card fraud during Card Not Present transactions.
For other payment types you might notice some transactions are cheaper than others – usually due to higher associated fraud risks – card processing costs can be further reduced by encouraging fewer costly transactions. This can be a game-changer for merchants with high transaction volume.
If you are operating a business in a known high risk sector increasing security along with other measures could reduce fraud risk and chargebacks lowering transaction fees associated with high risk merchant accounts.
3. Review Your Merchant Account Setup
In business things change over time and it might be the case that your merchant account or other method of processing transactions is no longer set up in the most efficient way for your business. If your merchant services provider has good support this might only take a quick call to arrange a quick review, of course it helps to have a little understanding of the process if you want to argue for lower card transaction fees. Card processing experts know what to look out for and have an understanding of the subtleties of the various pricing structures employed by merchant services providers and how they relate to the rates set by the card scheme, so it can be a good idea to get a second opinion from a reputable expert.
Similarly, it is not uncommon for card processing experts to find anomalies or incorrectly entered data for businesses in merchant account setups which can lead to higher card processing fees or to a merchant not receiving lower rates on card transactions to which they would otherwise be entitled. Can remember if you filled everything in correctly back when you signed up?
4. Switch Providers to Reduce Card Transaction Fees
In many cases simply switching to a merchant service provider with lower card processing fees for the types of transaction that are costing you the most can be the most effective solution. Like many industries the majority of merchants sign up with the providers with the best advertising, especially if you are new to card processing. However, this isn’t always the most economical solution – why should it be?
Regardless of the generic figures for transaction fees one finds on certain merchant services providers’ or price comparison websites, the real figures needed to make an expert merchant account comparison are found on your monthly statement from your merchant services provider, although some providers currently offer a single fixed rate for all the types of card transactions they support. A card processing expert will go through each of these transation types together with their associated transaction rates to find a cost-effective alternative.
5. Speak to a Card Processing Expert
A reputable card processing expert is usually the best way to go if you want to maximise reductions in card processing fees. An expert will have past knowledge of companies with similar costs and transaction volume to yours together with access to card processing statements showing real-world fees from a large number of customers’ merchant services providers with which to make a fine-grained comparison of what you are paying against what you should be paying. A merchant services expert will also be up-to-speed with the latest card processing products and deals on offer.
It is quite common for merchants to see reductions in card processing fees in the order of hundreds if not thousands per-month after review from a card processing expert who will also offer ongoing support through your contract which means they can offer the industry leverage needed if you want to keep card processing fees low.