Dear M & M: Any tips or advice on lowering or managing better my credit card processing fees? Anne
Dear Anne: A typical merchant can be charged as much as 5% in processing fees for accepting credit cards (equipment, processing costs, interchange costs and statement fees). Shoppers are increasingly using plastic over cash.
In 2017, it is estimated that only 23% of all sales will be made in cash. There are some ways to decrease what you are paying and save your company some money on credit card processing.
The first thing one should do is a little comparison shopping. A simple google search can help you find a list of companies that process credit cards. Find out what is the total rate will be with each new company you are checking into when all the fees are included?
Cancellation fees, statement fees, per transaction fees, software or equipment leasing fees all need to be considered. Then go to your current merchant account holder and ask if they can lower what you are currently paying. Read the fine print understand all the hidden charges. Various levels of service need to be considered. Pick a company you can live with.
Always do a search on their reputation and find out what others are saying about them. Avoid leasing any equipment. Saving 1% to 2 % of all credit card transaction can add up to a lot of money at the end of the year.
Transaction that a merchant enter manually always cost more that swiping the card. The credit card companies view this as being more vulnerable to fraud. Many of the fraudulent charges are made by people who do not have the card and they have just obtained the numbers. Since the risk is higher more fees are charged. If you suspect fraud ask the person for their photo ID. Match up names and pictures with the person trying to make the purchase.
Finally, take a good look at your credit card policies. If you handle smaller transactions one might want to impose minimum amount for credit card purchases. Take a good look at profit margins after you take out that 2%-5% credit card processing fee on smaller transactions.
Credit card processing fees are not going away. While everyone else is thinking up ways to increase prices for everything your business does take charge and look into some ways to reduce what you are paying to process credit card transactions. Probably the best source to go to for more information would be other business owners you know. Ask them who they are using.