Credit card processing is something that has to be a part of almost every type of business. Unfortunately, sometimes it can be costly due to the processing fees. While it may seem that looking for the cheapest credit card processing provider is the best solution, even the ones with the lowest prices can have hidden fees that end up costing you more. Nonetheless, there are a few ways to help your business get an affordable option, and learn how to protect your business against credit card chargebacks. Here are some tips on how you can get the lowest cost on credit card processing.
1. Inquire about interchange-plus pricing
You should seek out multiple companies for price quotes. Ask specifically for interchange-plus rates, as most will typically just provide tiered pricing. Be aware that some companies will try to discourage you from this pricing model since it makes them less money.
Some credit card processing companies will even require that you work with them for a certain time length, or process a specific dollar amount per month before qualifying for interchange-plus rates. It’s best to search elsewhere if a company has that requirement. Interchange-plus price quotes are easier to compare between different credit card processing businesses than tiered pricing. The reason is that with interchange-plus price quotes, the rate is the processor’s markup that’s added to a card network’s interchange rates that everyone pays.
In contrast, with tiered pricing, different credit card processing companies sort their tiers differently, making it difficult to make an accurate comparison.
2. Avoid nonstandard fees
When you look through a contract, you need to look at all of the fees that are noted carefully. It would be a good idea to write them down in a list or highlight them to keep track. In general, it’s best not to sign with a credit card company that has nonstandard fees.
These can be fees such as additional services, cancellation, audit, online reporting, postage and handling, and other types of fees. Nonetheless, if you have a strong preference for the company that charges the nonstandard fee, you can ask the representative if those fees can be waived. If they can, you can amend your contract or request a waiver.
3. Don’t lease equipment
While it may sound great to pay less upfront on the equipment costs, leasing contracts can be very punitive. Generally, these agreements can’t be canceled, and you have to fulfill personal guarantees.
These agreements can last three to five years and may require a monthly warranty fee on top of the lease payment. In addition, you’ll still be required to pay even if you return the equipment. If you want to keep the equipment, you’ll have to either renew the lease or buy out the equipment. Most of the time, the better long-term option is to purchase the equipment, which may cost less than paying the life of a lease for it.
About 7 in 10 Americans own a credit card, which means credit card processing will probably have to be a part of your business. These three tips will help you get the lowest cost on credit card processing. Make sure you carefully do the math when it comes to pricing, fees, and equipment. You can learn additional information about credit card processing at PaymentCloud.
Interesting related article: “What is a Credit Card?”