How to Reduce Credit Card Processing Fees for Your Business?

Credit card processing fees are a serious expense for many businesses, especially those in retail, e-commerce, or the service industries. These fees, which can range from 1.5% to 3.5% per transaction, can quickly eat into your profit margins. 

This is why a good understanding and managing of these costs is crucial to maintaining a healthy bottom line and ensuring long-term business success.

Credit Card Processing Fees 

Credit card processing fees are charges incurred by merchants for accepting credit card from customers. They typically have three main components:

1. Interchange fees: Set by card networks (Visa, Mastercard, etc.) and paid to the card-issuing bank. These fees vary based on factors like card type and transaction method.
2. Payment processor fees:  These fees are charged by the company that handles the processing of transactions. They may be  monthly fees, per-transaction fees, flat fees, equipment rental costs, etc.
3. Assessment fees: Paid to credit card networks for using their payment infrastructure.

It’s important to mention that fees can vary significantly based on the type of card used, the transaction amount, and your industry’s risk profile.

How to Reduce Credit Card Processing Fees

Reducing your credit card fees is all about being smart and proactive. 

Here are few tips: 

1. Negotiate with your processor: Don’t be shy about negotiating with your payment processor about better rates. If you’ve been with them for a while or process a lot of transactions, you might be able to get a better deal. Get quotes from other processors too. This gives you bargaining power.
2. Use swipe transactions: When customers pay, try to get them to swipe their cards or use the chip reader. It’s safer than typing in the numbers by hand. Safer means lower fees for you.
3. Collect customer data: Get to know your customers better by collecting more information about them. This helps spot fake purchases and stops people from saying they didn’t buy something when they really did. Over time, this can lead to lower fees because.
4. Become PCI Compliant: PCI compliance is a set of safety rules for handling credit card info., and you might even get better rates because you’re seen as more responsible.
5. Check your statements regularly: it’s a good idea to look over your monthly statements.. Keep an eye out for any weird charges or mistakes. If you see something odd, ask about it. It’s your money, so make sure you know where it’s going.
6. Offer ACH payments: For big purchases or repeat payments, think about using ACH payments.It is a bank to bank online transfer of funds and generally has a lower cost than credit cards.. 
7. Apply a surcharge: You could add a small fee for using credit cards. But be careful – there are rules about this, and you need to follow them.

Tips for High Risk Businesses

If your business is considered high risk (e.g., online gaming, FFL businesses, or subscription services), you may face higher fees. 

Here are some strategies to mitigate this:

1. You need to understand your risk profile: Knowing why your business is considered high risk and working on addressing those factors where possibleIs important.
2. Fraud prevention: By collaborating closely with your payment processor, you can implement fraud prevention measures..
3. Use an Address Verification Service (AVS): AVS services verify customer addresses, which can help prevent fraudulent transactions and potentially lower your fees.
4. Minimize chargebacks: Implement clear return policies and excellent customer service to reduce chargebacks. A lower chargeback ratio can lead to better processing rates over time.

How Electronic Transfer Inc. (ETI)  Can Help  Merchants Lower Credit Card Processing Fees?

Electronic Transfer Inc. combines years of experience, reliability, and tailored solutions to help merchants navigate credit card processing efficiently. 

Whether you’re a high risk business or simply looking to optimize your payment processes, ETI is a trusted partner. who can help, especially if you’ve ever been turned down before, have specialized challenges or simply need help processing payments.

High risk credit card processing: ETI works with many different types of businesses that are seen as risky, like gun stores, pawn shops, supplement companies, and adult health clubs. ETI knows these businesses face special challenges. 

Services offered:

• Online payments
• Phone and mail orders
• In-store payments
• Check payments
• Shopping cart support
• Mobile payments
• Donation handling
• Sales software

Why pick ETI?

• Lower fees on the market
• Flexible terms
• Quick start
• Helpful staff

Wrap Up

While credit card processing fees are an unavoidable part of doing business, there are strategies you can employ to reduce these costs. Cutting down on fees takes work and time but it’s worth it. Even small savings on each transaction can add up to a lot over time. Keep working at it, and you’ll see more money staying in your business! If you have any questions, give us a call and we will be happy to assist you.