Are cheap credit card processing companies worth the savings? Cheap credit card companies offer discount rates, statement fees and other charges that beat the competition in the merchant account industry where a percentage point can mean thousands in savings for your small business. Let us explore the typical fees and how you can start saving.
If you have an online business or for that matter a traditional small business, you have already seen the benefits of accepting credit cards. You increase your customers that convert to sales and your average ticket price increases by as much as ¼ most studies show.
After you have been established with card processing for a period of time, it then becomes worth while to examine your current payment processing company to see if there are any areas you can reduce costs. With discount rates that can vary between 2%-8% per transaction, even higher for high risk products or businesses, your merchant account and transaction costs can really add up, and any shaving of fees can mean large savings over the long term.
Your fees will vary depending on a few factors such as your average transaction amount, what product or service you sell, and how you process your credit payments.
Your credit card processing company has certain fees that are passed along from the credit card company that are unavoidable and are subsequently passed along to you.
The difference between what payment processing companies charge you and the fees that are dictated by the credit card vendor is your wiggle room for savings. Few small business owners take the time to question their statement and review the charges for areas of savings.
To review your statement in search of savings, begin with your discount rate.
This is the per transaction charge your credit card processing company is charging. Your merchant account reseller, in order to keep your business, often has a few percentage points of wiggle room to lower your fee. If your reseller is inflexible, shop around, see what competing rates are being offered and decide whether you want to continue your service with another reseller.
The secret to finding and working with cheap credit card processing companies is a full review of your fee schedule. Often your charges, and their profit, is hidden within indirect fees such as your account statement charge, transaction downgrade charges, minimum transaction charges and elsewhere.
Review your statements regularly and continually keep an eye open for better services and cheaper rates elsewhere, with such a highly competitive industry it is you the consumer that benefits if you remain vigilant for what cheap credit card processing companies can offer.