Yet credit card processing fees are one of those areas that many small business owners just accept as a cost of doing business. They don't realize that they could be realizing significant savings by doing some shopping around and finding the company that best fits their business.
Here are some ways to save money when you’re choosing your credit card processing company:
- Start by identifying your transaction profile. One of the most important factors in getting the best deal on credit card processing is understanding what type of transactions you’re likely to have. Rates can vary significantly for a company that processes 10,000 credit card transactions a month versus a company that processes less than 100. In addition to volume, your average transaction amount will matter, as well. If most of your transactions are under $10, you need a different type of plan than the small business whose transactions average over $200.
- Identify how you'll accept credit card payments. A small business with a brick-and-mortar store that runs physical credit cards through a machine has different needs than a small online business that only uses web-based transactions. Some credit card processing companies have plans that are more geared toward businesses that swipe cards, while other processing companies are better for online transactions.
- Ask about all of the applicable rates and fees. Some credit card processors will only have a per-transaction fee that you’ll pay whenever someone buys something. Others will have a standard monthly fee, usually along with a reduced transaction fee. Here again, whether or not you’re going to physically be processing cards can have an impact on this; most of the time, a credit card processor will want to lease or sell you equipment in order to process your transactions.
- Check out the credit card processor's reviews and chargeback rates. In addition to the fees that a processor will charge you for transactions, you need to be aware of some other factors. Customer service is important, for example; after all, this company could be responsible for thousands of dollars of your business. You need a company with a decent reputation. Beyond that, however, some credit card processors seem to have a higher rate of chargebacks or account freezes. Make sure you do some legwork, and hear from some of the processor’s existing customers before you make a final decision.
- Make sure you understand all of the applicable laws and terms of your contract. There are a number of rules you need to follow when processing credit card transactions. Some have to do with security, some have to do with Visa or MasterCard policies, and others have to do with your credit card processor. Violating any of those terms or laws could cost you thousands of dollars in the long run.
Don’t leave your business' well-being to chance by putting it in the hands of a credit card processing company that isn't right for you. Follow these tips to make sure you get the service that best fits your business' needs.
About the Guest Author
Emma Vasar is a finance expert whose passion for helping small business owners lead to the creation of MerchantAccount.net. You can learn more about choosing the best credit card processor here!