How to Save on Credit Card Processing Fees

Regardless of the kind of shop you are operating, most customers will expect that you accept debit and credit cards for payment. However, selecting the right credit card processing provider for loan companies, for example, or restaurants, or retail stores could be challenging.

You need to take into account various factors. To help you get the best deal for your needs, here are tips for choosing a company for your credit card processing needs.

Request Interchange-Plus Pricing Rates

Consult with a couple of companies to obtain pricing quotes. You will find that most will give you tiered pricing rates, so you need to specifically request for interchange-plus pricing rates to compare different quotes from different companies more easily.

The problem with comparing tiered pricing rates is the fact that providers add their markup fees to tons of interchange fees and then divide these into nonqualified, mid-qualified, and qualified buckets.

Opt for Monthly Services

Most companies offer three-year terms, but some offer monthly services, so you will not need to be locked into a long-term contract. Opting for monthly services will provide you with the freedom and flexibility to terminate the company’s service without having to pay any penalties in the event that you find a more suitable deal or if the service is not up to par with your requirements. 

Be Wary of Nonstandard Fees

When combing through all the contracts of different credit card processing providers, you have to pay very close attention to every single fee stated. For your reference, standard fees only include your statement fee every month, a monthly minimum, a monthly gateway fee (in the event that accept online payments), noncompliance fees, and PCI compliance fees.

It is also common for some providers to charge card network fees such as data usage, FANF, NABU, and APF, as well as incidental fees including NSF, chargeback, voice authorization, retrieval, and AVS, and batch.

Think Twice About Availing ‘Free’ Equipment

Make sure that you fully understand what it is you are agreeing to, as well as how much you need to pay for when accepting “free” equipment deals. For starters, find out how much would it cost you to purchase the equipment — a basic terminal and swiper for the credit card, for example — outright.

You must also take into account whether or not you are willing to waive the flexibility and freedom of a monthly service versus free equipment.

Man using a credit card and laptop

Think Long and Hard About Leasing Equipment

Majority of leasing agreements cannot be cancelled for the life of the agreement and include personal guarantees. This means that if you decide to stop your business operations and return the leased equipment, you will still have to make payments until the end of the agreement. Do your own math and compare what you stand to save versus how much you will lose if you decide to lease equipment.

The tips above could help you better compare rates, avoid unnecessary fees, and prevent you from being looped into lengthy contracts. So keep these in mind when shopping around for a credit card processing provider.

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