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DQ News: 4 Small Tips for Big Credit Card Processing Savings

Credit card processors have been known to use cryptic statements, ambiguous fees and spotty customer service as props to anchor a wall between your business and lower fees.

The truth is that credit card processing isn’t as confusing as some processors would like you to believe. To prove that point, I’m going to outline four simple tips that will arm you with the knowledge to quickly and easily lower your business’s credit card processing fees.

1. Interchange: know the best rate before you shop

You don’t have to ask a processing rep what his rates are because you can see the lowest credit card processing rates before you even start shopping.

There’s a little something called interchange that’s essentially the wholesale price list for the credit card processing industry. The best part is that interchange rates are posted right online for all to see.

You don’t have to take my word for it — check out the interchange credit card processing rates for Visa and MasterCard right here.

Now that you know the best rates, your goal should be to pay as close to interchange as possible on every transaction, and the way to do that is by getting pass through pricing.

2. Get pass through pricing

You know all those pesky, expensive mid and non-qualified rates you see on your processing statement each month? Did you notice they’re not listed on the interchange fee schedules for Visa and MasterCard?

The reason is that Visa and MasterCard don’t charge qualified, mid-qualified and non-qualified rates. Your processor is charging these rates by using what’s referred to as a bundled pricing model. It’s named for the way that interchange fees are grouped into general pricing categories by processors.

Bundled pricing is expensive, and makes it tough to decipher statements to figure out where your money is actually going.

A huge step toward lowering your processing fees is to dump bundled pricing in exchange for interchange pass through pricing.

With interchange pass through you pay actual interchange fees, the processor’s markup is a fixed percentage added to the actual cost of a transaction, and mid and non-qualified surcharges are completely eliminated.

3. Just say no to cancellation fees

Contracts with hefty cancellation fees were the norm for credit card processors not too long ago, but times have changed.

Heightened competition has made it so processors need to be flexible to earn your business, and a cancellation fee is often waived without a fight.

If a processing rep tells you that your merchant account will have a cancellation fee, simply ask him  to waive it. You’ll be surprised at how readily he agrees.

4. Match words to numbers, and scour the fine print

It’s one thing to be promised great rates and fees; it’s another to see them in writing. Review processing agreements with a fine tooth comb and make sure all rates and fees reflect what was discussed.

Keep in mind that many agreements have additional information that’s included by reference. Be sure to check the fine print for Web site addresses that contain additional information.

Keep a watchful eye

Finding a competitive credit card processing account is half the battle; keeping it is what counts. Be sure to check the first page of your monthly processing statement for updates and changes to your account.

Most statements have an “Important Announcements” section where processors will notify you of increases or changes in your rates and fees. If you notice that a fee is being increased, call the processor and request that it remain the same. Often times, catching the increase before it happens is enough to preserve the competitive rates you worked hard to obtain.

About the author: Ben Dwyer manages CardFellow.com, a Web site that saves businesses an average of 40% on credit card processing services by delivering multiple interchange plus quotes from leading processors instantly. Sign up for free today to start saving on your business’s credit card processing fees.

Photo Credit: Josh Kenzer

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