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Processing credit cards and debit cards are the bread and butter of a small business. You can’t simply operate on cash or check anymore, not if you want to stay in business. Small to medium businesses (SMBs) everywhere know this first hand.

However, when you offer people the convenience of accepting credit cards from them, you must, in turn, pay a fee to the credit card processor that handles all your cards. That fee can be crippling to a business, like giving a discount to every person who makes a purchase using his or her credit or debit card. But, it doesn’t have to be that way.

Contrary to popular belief, the credit card processing industry is a competitive one, so finding lower fees that work better for your business shouldn’t be that hard. Here are a few tips on saving on credit card processing fees:

Don’t Process Payments Through a Bank

In general, it’s difficult to find merchant services provided by banks. Most of the time, a third party provides them. So, when you have a merchant services account set up with the bank, it’s really another company that they've outsourced to. And the only way the bank can benefit financially from having those services on hand is by marking up the fees a little. The best thing to do here is cut out the middle man altogether and start searching for a competitively priced credit card processor.

Accept Mobile Payments

There are nothing but benefits to accepting mobile payments instead of traditional credit card processing methods. For one, the hardware and devices needed to do so are much less expensive than the traditional method. All you really need is a smartphone or a tablet and a card reading device. After that, you’ll need to set up a payment processing plan with the company you’ve chosen to go with. There are several options here, but the best choice for a small business is paying a fixed percentage per transaction. Most mobile payment processors offer a fixed percentage below 3 percent per transaction. This is the way to go. Here’s why:

Pay Stable Fees

Sometimes merchant fees can be all over the place, structuring their payments according to what seems like their own whims. This makes it difficult to know what your monthly payments will be, and thus it will be difficult to plan ahead with your company’s budget. If you have a choice (most mobile processing companies let you pay a set percentage) try to avoid paying an unstable fee structure and instead find a company that allows you to pay a fixed price.

The Art of Negotiation

Like I mentioned earlier in this piece, the merchant services industry is a highly competitive one. As such, many payment processing companies will negotiate on certain aspects of your contract. One of the best ways to get a good deal with a merchant service company is to use a competitor’s prices as a way to get a better deal. They’re likely to lower the fee if you’re willing to negotiate.

About the Author
Michelle Latham is the VP and blogger at Switch Commerce, a credit card processing provider based out of Texas.

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1 Response to 'How SMBs Save Big on Credit Card Processing Fees '

  1. http://www.e-junkie.info/2012/12/how-smbs-save-big-on-credit-card.html?showComment=1358768691820#c3766700972997144378'> January 21, 2013 at 4:44 AM

    I think really need to a smartphone or a tablet and a card reading device. After that, you’ll need to set up a payment processing plan with the company you’ve chosen to go with. There are several options here, but the best choice for a small business is paying a fixed percentage per transaction. Most mobile payment processors offer a fixed percentage below 3 percent per transaction

     

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