Close this search box.
Blog » Business Tips » Reducing Small Business Credit Card Processing Fees

Reducing Small Business Credit Card Processing Fees

cash to credit card flow

They say you have to spend money to make money. However, some processing companies have taken that too far with the exorbitant small business credit card processing fees that they charge. These fees can really grow as your transaction volume increases. Even as a small business, any reduction in the transaction amount related to a fee can quickly devour your profit margin.

Reducing Small Business Credit Card Processing Fees

Rather than assuming you have to accept all those credit card fees, consider these strategies that can reduce them for greater profitability:

Learn About Small Business Credit Card Processing Fees

The first step is to know how small business credit card processing fees work and the different fee models. Online content sites offer insights from industry experts about the credit card processing industry, types of fees, and the parties involved in the transaction process. Card brands like Visa and MasterCard regularly issue white papers and posts that explain these fees.

Other payment companies and even processors have their own blogs to deliver further insights about new types of fees, changing regulations about credit card processing, and other news that impacts what you need to pay for and how you can save money. Take the time to read this information and educate yourself to fight for fewer credit card processing fees.

Regularly Review Statements

If you already have a merchant account and process credit cards, you receive a monthly statement. This statement describes the transaction volume for the period. It also shows what fees were charged to your account. Pay attention to these statements because a credit card processor may add new fees or increase those you already pay.

This due diligence can help you catch unnecessary charges. If you don’t have a contract, a credit card processing company can often make these types of changes. Even with an agreement in place, they may still find a way to raise small business credit card processing fees.

Add Value Through Increased Volume and Lower Risk

You are the customer and the credit card processor needs you. There more transaction volume you bring them, the more they want you. As a small business, you can get the word out that you offer this type of payment method for in-person payments, mobile payments, and online payments. Broadcast it on your website, social media channels, email signature lines, and in your store if you have one. As more of your customers decide to use their credit cards at your business, you’ll be able to leverage this increased volume in your negotiations.

The other area to consider that adds value is to find ways to lower the amount of risk they see in working with you. For example, if you can swipe more credit cards, then you will be able to get a better transaction rate with the processor. If you are an online business, it’s unlikely you can swipe the cards. Instead, you use a virtual terminal for online transactions.

However, you can focus on measures that reduce chargebacks or modify your business model to reflect a less risky operation. For example, focus on local customers rather than an international audience until you have established trust with your processor. Working on improvements to your credit score also adds value in the eyes of your processing partner. In return, you will enjoy lower costs associated with small business credit card processing fees.

Focus on Security and Compliance

Look for ways that add more security layers and ensure compliance with the current regulatory environment. This reduces the risk of working with you in terms of chargebacks and potential data breaches. While the processor should also offer security tools, the responsibility lies squarely on your shoulders when it comes to protecting your customers. This means adding multiple authentication measures, encryption, and even biometrics.

Negotiate with Processors

Don’t be afraid to ask that your processing partner reduce the fees you pay. Negotiation can make a difference in these charges. Remember, don’t ask, don’t get.

There are many other processing companies out there. You can mention the aforementioned value you bring them and use this as leverage. Start with the unnecessary credit card processing fees first and see if they will remove them.

If they won’t remove these fees, perhaps they will lower them. However, if they are not willing to negotiate, then it’s time to shop for a new processing partner.

Shop for Competitive Small Business Credit Card Processing Fees

As you review your merchant account each year, it may be time to start looking at other credit card processors that have more competitive rates and fewer fees. There are numerous online directories, review sites, forums and groups that share insights into the various processors. Also, get estimates by calling each processor directly and sharing your volume and needs with them. Be sure to mention if you already have an account elsewhere and that you are looking for fewer fees.

Don’t be afraid to mention your desire to build a long-term relationship with a processor. Every company faces a cost when adding a new customer so the majority want to keep the ones they have and just add others over time. By sharing your interest in a long relationship, the processors that are vying for your business may be willing to offer better terms for your small business credit card procession fees.

About Due’s Editorial Process

We uphold a strict editorial policy that focuses on factual accuracy, relevance, and impartiality. Our content, created by leading finance and industry experts, is reviewed by a team of seasoned editors to ensure compliance with the highest standards in reporting and publishing.

Financial Author
My name is Nina Gass. I focus as a copywriter, writer, and editor involves working with customers around the world with money advice. I currently work as a Communications Manager at Crow Horwath International. I received a Bachelors Degree in English Literature from California State University, Northridge, and an MBA from DeVry University.

About Due

Due makes it easier to retire on your terms. We give you a realistic view on exactly where you’re at financially so when you retire you know how much money you’ll get each month. Get started today.


Top Trending Posts

Due Fact-Checking Standards and Processes

To ensure we’re putting out the highest content standards, we sought out the help of certified financial experts and accredited individuals to verify our advice. We also rely on them for the most up to date information and data to make sure our in-depth research has the facts right, for today… Not yesterday. Our financial expert review board allows our readers to not only trust the information they are reading but to act on it as well. Most of our authors are CFP (Certified Financial Planners) or CRPC (Chartered Retirement Planning Counselor) certified and all have college degrees. Learn more about annuities, retirement advice and take the correct steps towards financial freedom and knowing exactly where you stand today. Learn everything about our top-notch financial expert reviews below… Learn More