Running a small business has a variety of inconvenient expenditures, none more so than the fees associated with accepting credit and debit card payments. To avoid bothersome fees and safeguard your profit margins, use these methods to determine the cheapest option for your business to take credit card payments.
While it will be difficult to completely eliminate credit card processing fees, you may significantly cut them by following these steps.
Select the Most Appropriate Payment Processor for Your Business
Prior to selecting a payment processor, examine your options and choose one that lowers your expenditures for the services you require. For instance, if you do not require an online store, you do not need to pay the monthly charge associated with Shopify; instead, you can use Solid State Processing. Additionally, consider the size and volume of your sales when determining the most cost-effective charge structure.
Employ The Services of a Merchant Services Provider
While major banks offer many of the same services as payment processing companies, their fees are typically higher. For the best prices, work with a dedicated merchant services provider such as Solid State Processing.
Utilize a Payment Processor for Mobile Devices
If your firm is new or very tiny, begin with a mobile payment processor. These services charge a flat amount and require minimum equipment, so there are no contracts, monthly fees, or setup fees.
Typically, you can use a mobile payment processor that includes a complimentary swipe attachment for your smartphone or tablet and a complimentary app. Our app is scalable, which means you can always upgrade to add additional equipment or features later.
Avoid Protracted Contracts
Especially if you’re new to business, a multi-year contract with a typical payment processor may tie you down to prices that aren’t sustainable for your enterprise. Additionally, they can be difficult to exit and incur exorbitant termination fees.
Avoid additional fees and maintain your freedom by utilizing a payment processor that allows for month-to-month payments or does not require a subscription at all.
Eliminate Services That Are No Longer Required
If you’re considering subscribing to a subscription-based service, browse around to ensure you’re not overpaying for a slew of things you don’t require. Subscriptions are frequently tiered, and if you use only one function included in a company’s second tier but not the others, your fees might soon add up.
Discounts Can Be Negotiated
The advantage of a subscription-based service (if your firm processes a significant volume of credit card purchases) is that you can negotiate the processing charge. Generally, you’re stuck with the interchange fee, which is determined by credit card companies. However, you may request a reduction in the cost that represents the processor’s cut.
Decide on a Flat-Rate Pricing Structure
Avoid tiered pricing structures that are impenetrable and difficult to negotiate. If you’re a tiny or new business, go for a flat-rate pricing model. If your business is more established and you make a bigger volume of purchases, use a provider that charges on an interchange basis to obtain the most economical rates.
Limit the Credit Cards You Accept
Visa and Mastercard are accepted at the majority of retailers. However, you may have a more difficult time finding a merchant that accepts Discover or American Express. That is because the latter two charge higher interchange fees—in recognition of the additional benefits they provide to their clients.
You could save money by refusing to accept payments from higher-fee networks. However, keep in mind that this may result in the loss of some clients who prefer particular payment methods.
Minimum Purchase Requirements for Credit Card Purchases
To avoid processing fees from eating into your revenues on low-priced items, you could establish minimum purchase totals for which you will take credit card payment.
Dodd-Frank Act The Wall Street Reform and Consumer Protection Act of 2010 (often referred to as the Dodd-Frank Act) permits retailers to establish credit card minimums of up to $10. However, you may not be able to accomplish the same thing with debit cards; credit card network restrictions may prohibit minimum transactions, and Dodd-Frank does not apply to debit purchases.
Provide Discounts in Cash
You can pass on the expense of credit card processing fees to your clients by increasing your prices and offering a discount to cash customers.
Alternatively, if your state permits it (the majority do), you might levy a premium on all card transactions at the point of sale. Verify the rules of the credit card networks you accept to ensure that surcharging is permitted. Contact us for more information now.
