Credit card processing fees are necessary for running your business, but they don’t have to be exorbitant. You can keep your credit card processing costs low by auditing your merchant statement regularly and looking for transparent, simplified pricing models.

Tiered or bundle pricing is one of the worst types of processing, as it makes the processor money hand over fist. Also, stay away from transaction minimums.

Make Sure You Are PCI Compliant

Credit card processing fees are unavoidable, but there are ways to reduce them. One way is to ensure you are PCI compliant, which will help you avoid extra costs and reduce your risk of cyber threats.

PCI compliance is a set of security standards that must be met by any company that processes credit cards. It includes firewall configuration requirements, limiting data access, and updating software. It also requires strong passwords, restricting access to wireless hotspots, and encrypting data. It also requires that personal firewalls be used on computers and mobile devices and that paper records are stored securely.

These requirements can be challenging for small business owners, especially when completing self-assessment questionnaires. Glover recommends hiring a partner to help you through the process, such as a certified PCI service provider. They can offer an end-to-end solution for POS systems, card readers, and payment processing that is secure and have lower credit card transaction fees. In addition, they can provide breach protection insurance, which could help offset the costs of a data breach or other penalties from credit card companies.

Look for Simple Pricing Models

While a lower rate is essential when choosing a payment processor, it should not be the only factor. There are many other factors to consider, such as customer support, security features, and integration with existing systems. Also, compare rates across multiple providers to ensure you get the most competitive rates.

Credit card processing fees have three main components: interchange, assessments, and markups. Interchange fees are nonnegotiable and vary by card type, merchant, and transaction environment. Credit card brands impose assessment fees to cover the cost of operating their payment networks. Finally, markups are the payment processor’s fees for operations and profit.

While these charges are unavoidable, some steps can be taken to minimize them and keep your profits healthy. By following these tips, you can save thousands of dollars monthly on credit card processing fees without sacrificing the convenience of accepting card payments for your customers. This is valuable revenue that you shouldn’t let go to waste!

Reduce Your Chargebacks

Chargebacks aren’t just time-consuming for merchants to fight and costly. If your business receives too many chargeback disputes, your payment processor may consider you high risk and charge higher fees. While it’s impossible to eliminate all dispute-related charges, reducing the number of legitimate and illegitimate chargebacks you’re hit with regularly is possible.

The reason chargebacks exist is to protect customers from fraud by giving them a way to quickly and easily dispute questionable charges. The problem is it’s so easy that customers sometimes file a chargeback even when fraud hasn’t occurred. This could be because they didn’t recognize a purchase or thought their item was misrepresented.

The best ways to prevent friendly fraud-related chargebacks are to offer clear return and refund policies and provide excellent customer service. In addition, ensure your merchant descriptors are visible on your customers’ card statements so they can contact you to ask questions about a charge before filing a dispute. Finally, consider offering other forms of payment to limit your reliance on credit cards that incur higher processing fees.

Make Sure You Are Using EMV Technology

Despite the initial hardware costs, implementing EMV technology can help you reduce credit card processing fees. This is because it creates a unique transaction code each time you make a sale, making fraudulent cards much more difficult to counterfeit or use stolen data. This also helps you avoid costly chargebacks.

As fraud threatens consumers and businesses, implementing EMV technology is essential to securing payments. However, it’s important to note that you must have a point-of-sale (POS) terminal or system compatible with EMV. This will ensure that customers can quickly dip or insert their credit card into the EMV chip rather than swiping it on the magnetic stripe.

Upgrading your POS terminal or system to EMV will allow you to offer other secure payment innovations like mobile wallets. This can lower your processing fees by cutting out different fee types, such as transaction and monthly service charges. To avoid these fees, look for a transparent pricing model that uses interchange plus instead of a flat rate.

Keep an Eye on Non-Processing Fees

Many fees associated with accepting credit cards can add up and eat into your profits. By understanding what these fees are, why they’re charged, and how to minimize them, you can take control of your credit card processing costs.

The most significant factors that affect your total percentage of sales going to processing fees are the discount rate and the per-transaction fee. The card networks set these, and they’re non-negotiable. However, there are other fees that you can negotiate with your processor.

Non-processing fees include the PCI Non-Compliance Fee, the Voice Authorization Fee, and the Electronic AVS Fee. These are all fees the card network charges to offset their transaction risks. You can often avoid these fees by being PCI Compliant and following the other tips in this blog.

Getting rid of credit card processing fees is integral to keeping your business profitable. It may not be as simple as removing all processing fees, but by following the steps in this blog, you can reduce your processing fees and keep more of your sales revenue in your pocket.

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