Anyone in the US should know how complicated debit and credit card processing fees can be. However, you must understand the costs involved in processing a debit or credit card transaction. If you are knowledgeable enough, you will be in a better chance of noticing if you are being overcharged or not.
Even though it is impossible to avoid credit card processing fees, there is still a way to cut them down. In this article, we will be discussing how you can lower your credit card processing fees.
Find a Good Banking Partner
Everything starts with a beginning. If you want to do some serious business and make profits, you will need to find a good banking partner. You must ensure that you find a banking partner that can offer you the best credit card processing rates. If the bank offers you high credit card processing rates, you won’t have any choice but to adhere to them and end up paying too much in the long run. Worst of it all, it can leave you with hidden rates that can harm your profits.
A good bank should offer a good option for every business out there. For that, ensure that you choose a good banking partner.
Talk To The Processors
Sometimes you have to talk to the credit card processors and ask them to lower the rates. Here is where the power of negotiation comes in. If you want to negotiate with the payment processors successfully, you must ensure that you add value to the processors.
In other words, you want to make the processors want to do business with you. For instance, you can leverage your transaction volume to lure the vendor into reducing the rates. When the vendor sees that you are selling more, they will know that you are performing more transactions. In the long run, this would add more value to the processor.
Ensure that you give more to the processors for them to be convinced to lower the rates. But if you don’t transact enough, it would be difficult for them to lower the rates as you need. Make sure that it is a win-win deal.
Use an AVS For Credit Cards
An Address Verification Service is a vital tool to use if you want to lower the credit card processing rates. The AVS is typically a system that will verify the billing address of the cardholder with the card issuer. Over the years, AVS has proven to be a reliable tool that fights fraud. Also, it has become very useful in the ecommerce world and helps to reduce charge-backs. In the long run, this will help to save costs and generally reduce credit card processing fees.
What happens is that the customer will enter their address before the checkout process. This will then be compared to the address on the file with the corresponding issuing bank. After the comparison, the issuing bank will then send an AVS code to the merchant. At this point, the merchant can decide to reject or authorize a transaction using the AVS code.
Luckily, MasterCard and Visa both support AVS all around the world. The best part is that the US-based businesses enjoy incentives for using AVS with their Visa cards. They get low interchange rates when they perform an AVS check on their transactions.
Limit the Chances of Credit Card Frauds
If you pose a high-security risk as a merchant, you will in-turn have high credit card processing fees. In this case, you can avoid the credit card fraud in two ways: entering the proper security information and swiping the credit cards.
When you swipe as many cards as you can, you will lower the risk of credit card frauds because the new technology helps to reduce the rates. Naturally, the credit card rates will be higher when you key in the digits based on the fraud risk. Swiping also limits the chance of keying the wrong digits.
On the other hand, providing the proper security information will protect the cardholder. Plus, it validates the purchase too. Always ensure that you enter the billing ZIP code and the security code whenever you are asked for them.
Whenever you bypass this step, you will be exposing your business to a 1% additional fee on each sale. Also, when you forego the security process when keying in, you will have a higher processing fee due to fraud risk.
Settle the transactions in a timely manner
If you settle your transactions quickly, you will be reducing the interchange downgrades by far. Most of the US cards come with a clearing call (capture) that must happen in less than one day of the authorization. This must happen so that the business can qualify for low interchange rates. However, some entertainment and travel businesses can be captured within 8 days. Whichever the case, always try to settle your transactions quickly for you to enjoy the lowered processing rates.
Set up your account and terminal appropriately
One thing that most businesses ignore is the fact that a simple mistake can lead to high processing rates on credit cards. But you can avoid the high processing rates by setting up your account correctly. Whenever you set your account incorrectly, you will risk incurring extra processing fees as a penalty of setting up the wrong information on your account.
But when you set up the account properly, you will improve how the fee structure works. Nonetheless, this depends on the transaction type, the business, as well as how many transactions are performed.
Don’t forget to contact a credit card processing expert to help you further. The specialist should advise you on how to go about with your credit card processing fees and what you should do to reduce it. Also, ensure that you manage your transactions accordingly.
Remember that finding the best credit card processing merchant will help you get good rates. Ensure that you pick a merchant based on their reliability, professionalism, transparency, and past stories.