These days, nearly every business accepts credit cards. Paying with plastic is the preferred method of many customers worldwide. However, by offering credit card payment methods for your business, you’ll also be required to pay fees for payment processing services. Such fees can quickly add up, especially for small to mid-sized businesses.

That’s why here, the accounting advisory services experts from Accountants 2.0 has collected some insightful tips to help you minimize merchant fees and boost your bottom line!

Merchant Fees that You can Save On

It’s important to note that although you can minimize some fees, you won’t be able to minimize all of them. For example, the interchange fee charged by credit card companies is non-negotiable. Neither are assessment fees, which are another type of fee calculated by credit card companies based on your monthly sales volume.

However, there is some flexibility when it comes to the processing fees merchants pay for different processing equipment. This is because often, they offer pricing plans based on a number of things, such as sales volume, number of transactions, and more.

The most common types of processing pricing plans are as follows:

  • Subscription Pricing: This is when you pay a small monthly fee and a fixed rate for each transaction. Although credit card fees are non-negotiable, the processor covers all the fees based on transactions.
  • Flat-Rate Pricing: With this pricing structure, you pay a fee for each transaction. This can be great for small businesses. However, higher volume businesses that have a lot of daily transactions won’t benefit from this type of plan.
  • Tiered Pricing: Tiered pricing models are based on percentage fees assigned to different types of credit cards. This isn’t a preferred method as the processor decides what cards are based on a higher percentage.
  • Interchange Pricing: With this model, you’ll be charged for the interchange fees, in addition to a percentage of transaction fees as well. Due to this model, you may see a benefit in your monthly profits.

Tips to Minimize Your Fees

  • Compare Pricing Plans
  • Reduce Fraud Risk (collect customer details to show the processor you’re reducing fraud risks)
  • Physically Swipe Cards (most often doing so means lower processing fees)
  • Get the CCV Code (some processors charge extra for not obtaining it during the transaction)
  • Offer Other Forms of Payment
  • Invest in the Most Up-to-Date Card Reading Technology

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