In today’s economy, a business that does not accept credit cards is missing out on a significant source of revenues. 80% of consumers prefer to pay with credit cards vs. cash. Credit card payment volume is expected to increase by 33% by 2024. Unfortunately, many small businesses are wary of accepting credit cards as the world of payment processing is complex. It is easy to overpay for credit card processing if you don’t understand it. Small business owners don’t need to be fearful of accepting credit cards. With these tips, you’ll be able to understand credit card processing and get the cheapest credit card processing rates for your small business.
What Determines How Much You Pay in Credit Card Processing Fees?
The interchange rate charged by the credit card network gets passed along to your credit card processor. American Express charges 2.5% – 3.5%, Discover charges 1.56% – 2.4%, Mastercard charges 1.55% – 3.6%, and Visa charges 1.43% – 3.4%.
The type of business you have: High-risk businesses usually pay higher rates.
Your transaction dollar value: If your typical sale is in large dollar amounts, you may pay more in fees.
The volume of credit cards you process: The more credit cards you process monthly, the lower your transaction rate can be.
How you take credit card payments: Credit cards swiped through a card reader are lower risk because the cardholder is present at the transaction. Swiped cards have processing costs averaging 1.5% to 2.9%. Manually keyed credit cards are typically a phone or online sales where the cardholder is not physically present so the risk of fraud is higher. Keyed in transactions have processing costs averaging 3.5%.
The type of cards you take: Debit cards carry the lowest fees, while corporate and rewards credit cards have the highest processing fees.
Credit card processors don’t control the interchange rate as credit card networks pass these on. Processors can only control their markup.
Re-evaluate your processor’s pricing model to lower your rate.
Before you decide to do business with a credit card processor, ask if they offer flat-rate or interchange-plus pricing to lower your processing rate.
Flat-rate pricing is the same monthly rate for any credit card type, so you can see how much you’re paying in processing fees each month. The pricing is a fixed percentage based on what the credit card processor, card brand, and issuing banks charge.
Interchange-plus pricing is divided into charges based on the cost of interchange and assessments and includes an additional markup cost from the processor. All three costs are visible and separated on your monthly processing statement.
Avoid Processing Companies That Charge Lots of Additional Fees.
Some merchant service providers will tack on additional fees to your credit card processing services. These add-on fees can quickly add up. Some hidden fees to be cautious of:
- Application fees.
- Installation fees.
- Batch fees.
- Statement fees.
- PCI Fees.
- Termination fees.
A reliable credit card processor will be transparent with its fees. They should provide in-house support, so there should be no need for setup, installation, or support fees.
Get the Cheapest Credit Card Processing Rates With Zero Fee Credit Card Processing Program
A zero-fee program works by providing your customers with a cash and a credit price. When the customer pays in cash, they will receive a lower price. If they pay with a credit card, they pay a slightly higher price, including your processing cost. It’s a win-win situation. You eliminate credit card processing fees and customers have the option to pay by cash or credit.
With Finical zero fee credit card processing:
- You pay no monthly fees.
- You are never charged a swipe fee.
- You don’t pay any batch fees.
- You can offer customers the ability to pay with any major credit card.
Finical offers free payment equipment with a qualified merchant account. With the free equipment and zero fee program, you can save a lot of money on processing costs.
Finical provides innovative credit card security technology (EMV), offering PCI-compliant end-to-end encryption to protect your customer’s credit card data.
Finical also offers transparent pricing, no setup costs, 24/7 customer service, and free setup with a product professional.
Credit card processing doesn’t have to be overwhelming. Finical provides a variety of merchant account and credit card processing solutions for your small business. Our credit card solutions will allow you to accept payments from your customers quickly, securely, and efficiently. Ready for a free consultation? Contact us today.