4 Ways You Can Reduce Credit Card Processing Fees
Every credit card processing fee adds up, especially when you multiple it by hundreds or even thousands of transactions per month. These fees include statement, gateway, and minimum fees. If you can reduce those fees. By eliminating them, the savings will soon add up and your profit margin will incrementally increase. Yes, you can reduce your credit card processing fees. Many of these fees aren’t even necessary. Instead, they are just ways that the credit card processing company has found to increase its revenue.
With this in mind, here is a strategy that includes four tactics to get those fees down:
1. Educate Yourself.
There’s power in knowledge about any subject. That goes for credit card processing, too. Learn about the players, how processing works, what is involved in offline credit card processing compared to online transactions, and how and where your processing partner makes their money.
Great sources include available credit card processing experts. They are online with their own blogs, websites, and videos. There are also advocacy groups and organizations like the Small Business Administration (SBA). They can help you avoid the trap of existing credit card processing myths. Their valuable tips and resource guide you toward making informed decisions that save money.
2. Determine Unnecessary Fees and Eliminate Them.
It’s easy to assume that, because you are being charged these fees, you have to pay them. The reality is that many fees are not required but are just incremental revenue for the credit card processing company.
Unnecessary fees include monthly and annual fees, minimum fees, PCI compliance fees, and statement fees. Request that they be removed. Knowing what you can do without can guide how you compare other processors when and if negotiations don’t go your way.
3. Emphasize How You Add Value for the Processor.
Add value for a credit card processor by increasing transaction volume. That’s what their business is built on. The more transaction volume you do, the more they will want to keep you so use this growth to your advantage. If you haven’t grown your volume, focus on adding more customers who want to use credit cards.
You can do this by sharing you accept this payment by posting it on your website, social media platforms, in your store if you have one, and your online checkout form. Add value by improving your credit score. By illustrating that you are in a low-risk industry that doesn’t put the processor at a greater risk of fraudulent transactions, you can deliver even more value.
4. Focus on fraud and chargeback reduction.
Fraud and chargebacks can cost the credit card processing industry a significant amount of revenue. This also impacts your business. Be proactive in minimizing your credit card processing expense. Swipe more credit cards and enter the security information. However, when you are an online or e-commerce business, this is often impossible.
Instead, employ security methods, including two-step authentication. Other options are Address Verification Service (AVS), CCV, tokenization, IP address authentication, and biometrics. Train your staff to understand what defines suspicious activity related to an online purchase. Plus, ensure you are following all the requirements outlined by the PCI-DSS. Check that all possible security measures are being implemented. The processor is not your enemy. Working together can reduce chargebacks and fraudulent activity.
Reducing your credit card processing fees involves consider time and some costs, but it is well worth the investment. From changing payment methods to educating yourself and your team, you can be proactive, aware, and make better decisions. You’ll soon experience an effective return on investment in the form of lower overhead costs and a stellar reputation for secure payments.