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4 Ways to Balance Out Payment Processing Fees

Updated on January 17th, 2022
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Accepting online payments and multiple forms of payment is the norm for most small businesses today. The few business that don’t accept multiple forms of payment are no doubt missing out on additional sales and revenue.

We already know that people want to pay for goods and services that offer convenience and value, but it’s also convenient to make the payment process smooth and efficient. When you offer convenient payment methods, it does come with a price…literally.

Small business owners usually pay a fee when accepting credit card payments. While sites like PayPal and Stripe can also help you get paid quickly online, they charge a fee per transaction as well. To keep your business going and preserve your cash flow, the best thing you can do is balance out payment processing fees.

Here are 4 easy ways to do it.

1. Choose a Low-Fee Payment Processing System

This seems like an obvious solution, but you probably wouldn’t believe how many people are overpaying for payment processing fees. According to Investopedia, payment fees typically cost between 0.05% – 5% of the transaction amount, plus $0.20 to $0.30 per transaction.

When choosing your payment processing software, it’s important to compare a variety of features but really focus on the transaction fees. They may seem small but they add up if you’re going to be accepting multiple payments throughout the month. You can save literally hundreds (or more) in fees per month by choosing as low-fee payment processing system.

2. Factor Fees Into Your Pricing

When you know how much fees you’re going to be paying per purchase or invoice, see if you can factor those into your pricing. Small businesses that sell goods do this all the time. This is why there is usually a purchase minimum when you make a credit card payment.

The business has to pay a fee to accept your payment so they might as well make sure it’s worth it by requiring you meet the minimum spending limit. Another option would be to slightly raise the price of your good and services to balance out payment processing fees.

If you’re sending invoices, ask clients if you can factor in the price of the fee when you send your payment request. I work with a contractor who does this and I don’t mind paying for the fee at all as I enjoy working with this person.

 3. Negotiate a Lower Fee

This is a lesser known way to balance out payment processing fees, but it can still work. Try asking your payment processing company if they can lower your fees and see what they say.

Try to leverage what benefits you can especially if your business makes a certain amount of revenue each year. If you can promise them a specific number of transactions, they may be willing to work with you and lower your fee.

If you like one company’s features but wish their fees could be lower, scope out the competition and see if they will match a competitor’s lower fee structure so you can still use them. While there are no guarantees, doing this is definitely worth a shot.

4. Accept Multiple Forms of Payment

Every business transaction you do doesn’t have to be via credit or debit card. Depending on your business, you can also encourage customers and clients to pay in cash or via check and just keep track of your payments for tax purposes.

As a freelancer, I get paid in a variety of ways. I do accept credit card payments to accommodate clients who wish to use them, but I also have a few clients who pay via check and direct deposit.

Not paying fees in order to receive a portion of my income really helps me balance out payment processing fees when I do have them.


Paying fees to accept a wide variety of payments for your business is inevitable. Still, you have options when it comes to lowering and managing those fees.

Take your time when it comes to choosing a payments system and compare the fee terms. Also, be open to adjusting your prices and accepting other forms of payment.

Choncé Maddox

Choncé Maddox

Choncé Maddox is a debt expert. She helps ambitious millennials and Generation Z get our of the mounds of debt they are in following college. In 2015 she realized she couldn’t afford to do her own laundry, she was so broke. She had to make a change. Over the next three years she personally tackled $50,000 in debt and became debt free. She teaches others her passion since.

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