8 Ways – Small businesses can immediately lower credit card processing fees

Having to deal with your credit card processing  fees to some is the most painful task a business owner has. Though it may seem painful, everyone knows that this is an area that provide significant savings immediately for a merchant. Here are some helpful tips that will get you on your way to reducing your credit card processing fees.

8 Ways Small Businesses Can Manage Credit Card Processing Fees

Read the Fine Print: This advice applies to every merchant but is specifically important for small businesses. Know the rate that you agreed to and educate yourself on the various credit card processing fees that you are being charged. Many times merchants will enter into an agreement thinking they will be receiving a low rate and then find out years later that they received a promotional rate that was quickly changed only months into the contract. If you find that this has happened to you, you might be owed a refund.

Look at Your Termination Clause: If your termination clause states that you have either a minimal fee to terminate or no fee at all, this it to your advantage. Shop your rate around and see if another processor will propose a larger reduction in your credit card processing fees.

Perform an RFP: This is probably a no brainer for merchants looking to reduce theircredit card processing fees. The point we want to bring up is to look at various options for your business. Sprinkle in a couple local ISO options along with some top-tier processors. If the ISO’s provide better service and are comparable to price, this should probably be your first choice. However, you will be surprised how low a top-tier processor can go if pushed. Push them!

Dont Settle for Standard: Seeing the word “standard” on your credit card processing statement is not a good thing. This is called a downgrade and means that you are receiving a much higher rate than what you could be receiving. Ask your processing representative on what you can do to stop this from happening.

Apples to Apples: If you are going to perform an RFP to choose your next credit card processor, write the RFP specifically in a way that will create an apples to apples comparison. Detail in your RFP what type of format you are looking for and a timeline as to when all proposals should be received. We suggest you ask for a Interchange Plus type pricing as this is the easiest way to reduce your fees and compare between bids.

Use a Broker/Expert: This could be the easiest way to reduce your fees and will probably give you the best results. Use a credit card processing broker to obtain a low rate for you on the market. One thing to keep in mind, make sure to use a broker who is independent. The brokerage fee that you will pay is well worth the additional savings you will receive from someone working for you, not another processor.

Know Your Percentage: What is the easiest way to stay on top of your credit card processing fees. Take your monthly total credit card processing fees and divide by your credit card processing volume. Keep track of this percentage and look for trends and this will allow you to catch your processor secretly raising your rates. A quick rule of thumb, if you are a small business and you are 2.8% or above, its time for a new rate.

Every 2 Years: If you have gone over two years without looking at your credit card processing fees and if there is a better rate out there, you have gone too long. The standard rule applies, if you don’t ask you wont get it. This is why so many processors have retention departments, they will reduce your rate but you have to ask.

Tags: Credit Card Processing, Credit Card Processing Fees, Processing Brokerage, Small Business

This entry was posted on Monday, November 2nd, 2009 at 5:53 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.