Just about any business that accepts credit cards is looking for advice on how to minimize card card processing fees. The first thing you can do is to encourage and suggest that your customers pay in cash. Cash has no transaction cost and will be the most profitable for you. Next, you can also push your customers to use debit cards as much as possible, how to be a credit card processor since the debit card processing fees are dramatically less than for credit cards. You can also choose not to accept certain types of credit cards. For example, many customers like to use American Express cards because they get great benefits. These benefits come from gouging merchants like you with a processing fee that can be as much as 5%! Disallowing these more expensive cards can also save you money.
It’s also worth shopping around in order to keep your credit card processing fees to a minimum. Different processing companies will have different rates and you can take some time to call different companies to understand what their rates are and whether this would be cheaper or more expensive for you.
Keep in mind that they don’t make these rates easier to compare on purpose since they don’t want you to understand that you are paying more than you need to. Some web sites can help you with comparison shopping in order to help you find the most affordable processing plan for your company. If you find a cheaper processor, double check to make sure that you understood and calculated everything correctly, and then feel free to switch! The new processor should make the transition easy.
Any business who is already or is considering accepting credit and debit cards in their business should understand how credit card processing rates work. For many businesses, especially those with smaller transactions that tend to be heavily weighted towards card usage, credit card processing can be one of their biggest expenses. Keep in mind that this comes directly out of your gross revenue and that every dollar you send to the processor is a dollar that you can’t use to pay your employees or take out as profit. Processing rates are not simple to understand and the credit card companies will not do their best to help you since they don’t want to make it too easy to compare your rates and select the cheapest company.
This is one of those cases, where a good deal for you is a bad deal for them and the reverse is true as well. Typically a transaction rate will have a flat fee and a percentage fee associated with it. These credit card processing rates will differ for credit cards versus debit or bank cards as well.
There’s even a difference in rates for when you have the card in your possession versus when you just have the numbers from a phone call or writing them down to enter later. You can find websites that will do their best to help you compare. They will require that you have a guess at your transaction number and total for the typical month since the types of transactions can have a large affect on the rates.
Almost all retail businesses accept credit cards these days and usually do it through a hardware credit card processing terminal. Other businesses that work remotely or at their customers locations are not taking credit cards as much these days for a few reasons. First, many of them are used to invoicing their customers for the transaction total and getting paid later. OR, it may be a hassle to write down the credit card number and process it later in the office.
Portable credit card processing machines are getting more common and have a ton of advantages for mobile businesses. First, processing the card on the spot is better for the business and for their customers. The transactions costs will be lower when scanning the card itself versus typing in the information later. Also, you can tell a rejected transaction right away and request a different card or a check instead. You also don’t need to deal with invoices, collections, and depositing checks at the bank.
From a customer’s point of view, they prefer that you don’t have their precious credit card number written down and like to get a printed receipt on the spot. Though the cost of a portable terminal is not cheap, most businesses can easily justify it both in terms of added convenience and added revenue compared to older methods of taking payments from customers. Ask your merchant services provider if they have the option of using a portable terminal for your payments and streamline your payments processing today.
Due to the staggering amount of daily transactions, and the number of people involved in every step of the process, there exists a sizable amount of risk. Errors can and will occur- and errors, regardless of their origin, cost everyone- the cardholder, the bank, the merchant and the processor- in the long run.