If you own or manage a business you know there is no escaping the fact that you need to accept credit card payments. And these days, when the pandemic has changed many businesses' policies where cash is not accepted now, credit cards become the way in which your clients conduct their business with you. In short, having the ability to accept credit card payments is not just something nice you do for your customers, it's a basic necessity for any business that wants to survive in today's economic conditions.
What are the average credit card processing fees that businesses must pay?
There are different matters that are taken into account when determining a merchant's processing fee, but, on average, they run between 1.5% and 2.9% for cards that are swiped while keyed-in transactions can run as high as 3.5%. If you want to pay the lowest fees it may be worth your time to shop around, although knowing which credit cards your customers generally use may be a limiting factor.
The final processing fee that you may be paying now is most likely a combination of which credit card company you use, the credit card network, and the payment processor.
Are there some steps you can take to lower the fees you pay?
You may start by negotiating with the credit card processors. To be successful, you need to leverage your transaction volume. That means that the more you sell and the more transactions that your business performs, the more attractive you become to them. The more you give them, the more they would be willing to negotiate with you. You can also:
Show a Willingness to Reduce Credit Card Fraud
If you are perceived as being a high-security risk, it will be difficult to negotiate a lower rate. You may avoid being seen as a risk by swiping credit cards and entering security information. In short, swipe the card and, when prompted, enter the billing zip code and security code. It may take you a little longer per transaction but worth it in the end.
Use AVS – Address Verification Services
Verifying your customer's billing address is considered an important tool in fighting fraud. If your customer enters their billing address at the time of checkout and it is verified by comparing it with the address on file at the issuing bank, you get a code that allows you to continue with the transaction. Both Visa and mastercard support using AVS.
Make Sure Both Your Account and Terminal are Properly Set Up
Set up your account right from the beginning or you risk incurring higher processing fees if you provide the wrong business information. Also, set up your terminal and process all transactions within 24 hours. Both actions will result in lower processing fees.
Turn to an Expert at Credit Card Processing
You may not be an expert on credit card processing fees but there are people who are. They not only know a great deal about processing fees but they also have a relationship with processors and can help you get a lower rate. Just a little bit of insider information may be all you need to successfully decrease your credit card processing rates. More information on lowering your rates is available at Interchange Pros.