The Top 7 Ways To Lower Your Credit Card Processing Fees

The Top 7 Ways To Lower Your Credit Card Processing Fees

By: Passive Income Expert & Serial Entrepreneur W. K. Little 

If there is one thing that we learned from 2020, it's that life is filled with uncertainty. The global pandemic greatly impacted the economy and consumer behaviors, affecting businesses both large and small. Whether workspaces have been rearranged to ensure employee safety or websites completely revamped to scale for massive growth in e-commerce sales, most businesses coped with a constantly changing environment.

Consequently, many businesses were forced to quickly cut costs to offset lost revenues while also making significant investments to comply with local laws surrounding the pandemic.

With the start of the new year, now is the perfect time to find long-term solutions to lower costs for your business. A great place to start, without greatly sacrificing the customer experience, is by taking a look at your credit card processing solution and all the associated fees.

As a Leading Credit Card Processing Expert, here are my top action items designed to help your business save money when accepting credit card payments this year and beyond:

1. Institute A Proven Cash Discount Program

The easiest way to avoid paying credit card processing fees is by passing them on to your customer. There are several rules regarding surcharging that merchants must follow, so compliance is key. For example, merchants cannot surcharge a debit or prepaid card, which means your customer has the option to avoid the surcharge if they wish.

Furthermore, not all states allow surcharging, so due diligence – whether it's thorough research, implementing specialized software or something else – is needed to help you comply. As businesses try to cut down on costs and more states ease up on their surcharging laws, expect to see more merchants pass their processing fees on to consumers in the future. 

Related:  $0 Credit Card Fees! - Your Business Doesn't Have to Pay Credit Card Fees Any More and Probably Shouldn't

2. Capture More Customer Data

On e-commerce and phone-based transactions, capture the cardholder's full billing address to avoid more expensive interchange costs, which comprise a large part of your processing fees. 

Interchange fees are nonnegotiable fees paid to card-issuing banks for processing your customers' debit or credit cards.

Explaining the finer details of interchange is a full article unto itself. At a basic level, the biggest takeaway for merchants on interchange-plus or tiered pricing models is the more information obtained at checkout will minimize the interchange fee assessed.

If you sell to other businesses or the government, be sure to submit level two and level three data, such as the invoice number, your Tax ID, the item commodity code and all additional relevant information because this can reduce interchange costs by over 20%. In the case of one network, Visa, a transaction with only basic info provided – a nonqualified transaction – could have a fee as high as 2.95%, whereas providing level-two data could bring the fee down to 2.05%. Other networks may have variances in interchange costs.

And lets not forget that Surcharges ARE ILLEGAL. Whereas Cash Discount Programs, Done Correctly, ARE TOTALLY COMPLIANT!!!

Aside from processing this information manually, there are payment gateways that can automate these fields to help smooth out the process of qualifying at the lowest possible interchange rate on transactions.

3. Swipe Whenever Possible

Face-to-face transactions are less risky for merchants and card-issuing banks and therefore have lower interchange costs. Encouraging customers to pay in-person and physically swipe, or now dip, their card, versus online or over the phone, will allow you to cut down on costs. Swiped sales using EMV (chip) are also harder to dispute, so merchants have more protection against chargebacks. 

4. Offer ACH Payments

All merchants should consider offering ACH payments, or electronic bank-to-bank transfers, because they are faster and more reliable than physical checks.

Additionally, they do not have interchange fees like debit and credit cards, making them considerably less expensive for businesses to accept. 

5. Become PCI Compliant

Payment Card Industry (PCI) Data Security Standard is a set of rules designed to protect sensitive credit card data. Processors often give new merchants a set amount of time to become PCI compliant, generally between 60 and 90 days. After this time period, processors charge their merchants a monthly noncompliance fee.

Making sure that your business is PCI compliant ensures you avoid extra fees and reduces the risk of cyberthreats. As an added bonus, many PCI providers offer breach protection – sometimes as high as $100,000 – which acts as an insurance policy in the event your customer credit card data is compromised. 

NOTE:  ALL WHOLESALE PAYMENTS CLIENTS RECEIVE FREE PCI COMPLIANCE Done For You!!!

6. Check Your Statements

One of the simplest ways to reduce monthly fees is to routinely make time to review your statement. Unfortunately, many processors gradually increase their fees over time, especially at the end of the year. Pricing changes are always indicated on your statement yet are often overlooked by business owners.

RELATED: $0 Credit Card Processing Fee's???- Check Your Statement For These 4 Terms

Catching these changes gives you the opportunity to negotiate terms with your current processor or find another payment provider better suited for your unique business needs. 

7. Change Your Processor

It never hurts to ask! Your payment processor knows the nuanced details of your fee schedule. If you are looking to minimize costs and unsure where to begin, start by scheduling a 3rd Party Expert Review of Your Statement. They will be able to offer you the best advice specific to your business needs and the current state of your industry.

Whether it is a creative cost saver or a simple rate reduction , you have nothing to lose by making that friendly phone call.

For example, Cash Discounting DONE CORRECTLY can help struggling Business Owners KEEP a lot more of their hard earned profits!

Once businesses are set up to process payments, it is easy to put it on autopay like the internet bill and forget about it until there’s a problem. By taking a few moments to look at your processing fees, you’re on your way to valuable savings for your business. Like the promise of a new year, it's a positive step in the right direction for business growth.

As THE Industry Leader Wholesale Payments is here to help you determine if you are working with the right people by asking yourself these simple questions.

If you are interested in learning more about the Credit Card Processing Industry and which processing solution is right for you AND Your Business, simply call 772-237-1017 (24 Hour Direct Line to Leave a Detailed Message) or by email by clicking HERE NOW!