As a business owner, you know that every cost impacts your bottom line. One of the most prevalent is the processing fees you pay for card payments. These fees may be unavoidable, but you can take steps to reduce them. These 10 tips will help you reduce your card processing fees.
1. Follow the Rules
Maintain your PCI compliance when you take payments. If your customers pay online, collect CVV codes and check cardholder information before you accept and process payments. Confirm the identity of cardholders in person as well. These steps can reduce the number of chargebacks, and help you reduce fees over time.
2. Don't Manually Enter
Every time you manually enter credit card information, you risk human error and incur higher fees as a result. Make sure your card reader is up to date so you can avoid manual entry.
3. Use an EMV Reader
Even better than swiping is ensuring you are taking advantage of chip technology. An EMV payment is more secure than a swiped transaction, and thus generates a lower fee on each payment you collect.
4. Watch Other Fees
Many processors charge additional, non-processing fees like account maintenance fees and minimum processing fees. Keep an eye on these as you go, and look for ways to cut or eliminate the extras you pay each month.
5. Interchange Plus Pricing
Flat and tiered rate processing fees represent blended rates to cover processor assumptions. An interchange plus model, in contrast, gives you transparency in the pricing you receive. If you tend to take larger payments from your customers, this usually generates savings over time.
6. Settle Transactions Quickly
The longer your transactions sit between taking and settling your payments, the more risk you generate and the higher your fees become. Make a point to settle your transactions at the end of every day to keep your risk profile strong and your fees low.
7. Reduce Fraud
Work with your processor on data collection and pattern recognition to reduce fraud against your business. Provide return policies to your customers to further put them on notice of your right to decline a return. Lower fraud and reduced chargebacks help you achieve lower rates.
8. Encourage Debit
Debit cards give you lower transaction costs than credit cards. While you don't want to refuse credit cards, you can post signs or add surcharges for credit card payments to reduce your fees.
9. Set Transaction Minimum
Since fees are based on a combination of a percentage and a flat rate, a minimum transaction amount can help each transaction be more profitable.
10. Negotiate Your Fees
If you feel your fees are too high, try to negotiate with your processor. The longer you are in business, the better your leverage and ability to reduce rates.
Card processing fees cut into your profitability. The more you can do to reduce those fees, the stronger your bottom line becomes. Take action today to reduce your processing fees.