How to Lower Your Credit Card Processing Fees
Does your business take credit cards?
Of course you do!
Credits cards are the preferred method of payment for most customers; therefore, your business must have an effective means to process credit card payments.
That said – your credit card processing fee may vary depending on the type of your business. It can range between a couple of hundred to thousands of dollars per month.
Therefore, you must proceed with due diligence and choose a payment processor that offers the most competitive rates in the market.
Credit card payment processing involves several parties, such as banks and intermediaries. Therefore, business owners must pay a fee to these parties for rendering their services.
Credit card payment processing is a complicated domain. The payment processing companies have become adept at making you believe that you are getting a reasonable rate, whereas, in reality, you overpay.
4 Ways to Reduce Credit Card Processing Fee
No company likes excessive fees and over the top charges eating into their profits. Fortunately, there are many ways you can reduce the credit card processing fee, and here are four of them to get you started.
1. Set up an Address Verification Service
Did you know that AVS is a great system to minimize the risk of credit card fraud and chargebacks?
The good news is – it is a simple process to verify the cardholder’s billing address with the issuing bank. In case the entered address does not match the customer’s address in the bank’s record; the bank will decline the payment automatically.
Also, note that many payment processors encourage small businesses to use AVS and offer incentives in return.
AVS is a recognized fraud-fighting tool to reduce your credit card processing fee significantly. Speak with your payment partner and understand how you can add this valuable tool to your payment gateway.
2. Settle Transactions Promptly
Most businesses report their business transactions in batches at the end of each business day. Batching helps you consolidate a set of transactions executed over a specific period and submit to your bank for processing.
The credit card issuing bank processes the payments and transfers the money into your bank account.
You should keep in mind that settling your charges within 24 hours of the transactions can usually get you the best interchange rate. Otherwise, you might be subject to an interchange downgrade.
For example, if you run a retail business, do not make the mistake of putting off your clearing call.
3. Choose a Credit Card Processor Carefully
Just like most businesses, credit card processors have to compete to attract and retain their clients. Therefore, credit card processing fees may vary considerably depending on the company you choose.
For example, one company may offer a low rate to lure new customers, while another charge more for the same service. In any case, it pays to shop around and find the best deal.
4. Reduce the Risk of Credit Card Fraud
Credit card frauds are devastating to small businesses in the US, costing them about $190 billion every year.
This often drives up the credit card processing fee along with the losses. However, as a business owner, you can protect your business against credit card fraud by mitigating the causes.
One of the best ways is to ask your customers to verify their personal details, such as the card’s billing address.
Data One Merchant Services brought this article to you. We hope to win your business by helping you identify ways you can save an exponential amount of money by avoid overpaying your payment processing merchant.
We are a company you can trust, with a reputation for transparency and excellence.
For a free statement review, quote or consultation, contact us at 800-818-0420.