So many small business owners and operators feel that they are paying too much for credit card processing. Unfortunately, a good number of those individuals are probably right. While it can be tempting to simply put issues like credit card fees off for another day, another week, or even another year, the fact remains that credit card processing is costing your business valuable money each and every day.
Thankfully, there are a number of ways to save on credit card processing fees including understanding exactly how these fees work, selecting the best merchant services provider for your business, adhering to best practices when it comes to accepting credit cards, and more.
The Nuts and Bolts of Accepting Credit Cards for Your Business
Perhaps the most straightforward way to reduce credit card processing fees is to always make sure that your business adheres to best practices when processing credit, debit, and other electronic payments. Avoiding penalties like chargebacks is great (more on this below), but you will also be protecting your business from account suspensions and even terminations.
There are two basic ways in which you will accept credit cards. Here is a high level guide of how to process each:
Card present credit card transactions will generally result in a payment using a POS System and using the card’s chip. Chip transactions are the best case scenario for merchants as they carry the best validation and anti-fraud guarantees. If a chip fails, work with your merchant services provider to understand what back-up steps can be taken.
Card not-present transactions carry a higher risk for merchants. This generally comes up for over-the-phone orders or other similar situations. It is recommended that you get the following information at a minimum:
Credit card account number
Full name as it appears on the card
The time of the transaction
Any relevant notes as they pertain to the transaction
Choosing the Merchant Account Pricing Structure to Save on Fees
The pricing model you choose for your credit card processing will pay a huge role in how much you pay each month. Naturally, there is no one right answer for every business. By understanding the different pricing models and the needs of your business, you can work with your merchant services provider to select the best option for you. Here are the big four (4) when it comes to pricing structures:
Interchange-Plus pricing: sometimes also referred to as cost-plus, interchange plus offers the greatest transparency and detail per transaction. The rates and fees are stated clearly and separately, but this can also be information overload for some business owners.
Tiered payment processing: the old standby, tiered payment processing categorizes transactions into tiers based on volume, dollar amount, and more depending on your individual agreement. This pricing model has fallen out of favor, but still may have its advantages.
Membership billing: if transactional rates and reading complex statements aren’t your thing, paying a flat membership rate might be what you have in mind. These pricing models are not as adaptive as the other models as the price remains static, but this can end up saving money in the right situations.
Flat-rate pricing: think interchange-plus with a little less information and a little more streamlining. The benefits of flat-rate pricing is that it is easier to read and to understand. The downside is that your rates can balloon and it can be more difficult to see exactly what is going on.
How Credit Card Processing Providers Can Save you Money
So how exactly can the right merchant account save you money? There are several different ways, all of which can be important at various points of your business life cycle. The most important point, however, is that choosing the correct merchant account solution and provider may just be the most important decision you make when it comes to saving money on credit card processing fees.
Credit card processing fees should be fair and transparent. Professional merchant service providers should be able to give you a very good idea of what you can expect to pay in credit card processing fees before you ever sign. If your prospective credit card processor is mum with this information, they may have something to hide.
Once you begin your business relationship, your merchant account provider can save you money by educating you about best practices, helping you fight chargebacks and other incidental fees, keeping your prices fair, helping you select (or change) the most advantageous pricing model, and much more!
Affordable & Transparent Credit Card Processing Solutions from True Merchant
The payment processing professionals of True Merchant understand that overpaying for merchant services can not only be frustrating but also damaging to small businesses. That is why we are proud to offer transparent, fair pricing models which fit a wide range of business types and sizes. Feel free to call or fill out a brief form to learn about how True Merchant can help your small business grow.
Whether you are looking for credit card processing, online payment solutions, business funding, mobile payment solutions, or any other payment processing service, let True Merchant go to work for your business today!