by Jan 17, 2021
As a business owner, you are well-acknowledged about how expensive it can be when it comes to accepting payments. Although it is essential to be able to accept credit and debit cards in business, to stay competitive in the current modern market, it is also very important to make sure your money is being used in possibly the most effective way. Due to this, understanding that credit card processing is often associated with a typical fee becomes easy. Also, what does it mean, and what you do and don’t have to pay can have a great impact on business.
Types Of Fees:
There are types of fees that every merchant has to pay at any cost. On the other hand, there are hundreds of more fees that they don’t have to pay at all!
Have a look below to learn more about these credit card processing fees. We have a breakdown for your ease. You will understand what they’re for, and how you can pick the best payment provider for your business:
Fees That Are Unavoidable In Business:
Before we jump into the actual topic; how to avoid fees? It is important to discuss the fees that must be paid in order to accept credit cards. Every credit card that you accept comes with a cost. This cost is associated with what is exclusively set by the credit card providers themselves. It is called an “interchange” cost and it is required by all merchants that are willing to accept credit cards. Again, the interchange is a completely non-negotiable fee that you must pay. The cost is entirely based on individual cards.
The other unavoidable fee is whatever method is chosen by your credit card processing provider to bill for their services. If you are an individual business owner, you are not able to deal directly with the credit card provider companies. Instead, the companies have to set up a merchant account that will be linked with a merchant services provider. In this way, you will be able to accept any payment, other than cash.
The majority of the merchant services providers have a long list of ways they charge for providing services. It can be markups on top of interchange or even flat monthly subscriptions. Either way, the only other unavoidable fee associated with credit card processing is paying for the services of a third-party facilitator.
Fees That Are AvoidableIn Business:
When it comes to additional fees, there is a long list of what could be covered here. There are hundreds of traditional merchant services providers that believe; the average merchant is not capable of understanding or has time to read their monthly statements. This fact is the main cause which leads to countless additional fees being added as a result of which, 1000 of dollars are wasted.
Ways To Avoid Unnecessary Fees:
Below we have ensembled 4 of the most common yet simple ways to avoid unnecessary credit card processing fees to save money for your business growth:
The Setup Fee: This is one of the most common fees that is usually charged when you implement a new account. Some of the typical providers will not only charge a setup fee for the merchant account itself but also for the implementation of any extra technology solution if needed. It can be a terminal or even an online shopping cart.
Avoid This Fee: You can skip this fee by getting linked to a payment provider who knows how to share your values! When speaking with potential providers, make sure you ask specific questions about setup fees to get answers that are relevant to the true cost of doing business.
The Early Termination Fee: You may be too familiar with this type of fee as well. It is the case when your current payment provider requires a contract during your signup, there is a chance that an expensive termination fee is on the way.
Avoid This Fee: You can avoid this by finding a payment provider that offers month-to-month billing and there is nothing like a contract. In this way, you will have the flexibility to change as well as grow as a business without being stressed about a specific provider.
The Batch Fee: You understand how essential it is to batch your terminal daily if you have a brick-and-mortar location. In simple words, batching a terminal means that all your transaction information gathered that day, will be sent to the bank so that your money can be easily deposited. Many providers will charge merchants for each and every batch, resulting in quick add-up!
Avoid This Fee: You can avoid this fee with the help of an open and honest conversation with your service provider. You need to direct questions about fees which will force your provider to be honest about exactly what they are charging from you. In this way, they won’t be able to charge unnecessary credit card processing fees to overburden you.
The Reprogramming Fee: In this modern era, technology is constantly being improved at a fast pace. Keeping the technical development in mind, your business deserves the latest and greatest technology when it comes to takinga payments. If you think that there is a need for your terminal or POS system to be upgraded, a big expense is on the way!
Avoid This Fee: While you are understanding the options relevant to a payment processing credit card provider, make sure you take a closer look at the customer service departments. Does your service provider know how valuable the customer experience is? You need to ask direct questions about the support experience. This can range from phone wait times to online knowledge base access, as well as even technology upgrades.
According to many business owners, the idea behind credit card processing is an expensive, necessary evil, and an annoying one. The great news is, it doesn’t have to be that way!
When you are armed with the knowledge of what is required and what is not at all needed, you can have more productive conversations with your service provider. This will ensure that you are getting the best value for every dollar you pay.
If you think that their fee policy is not making you happy, go ahead and consider taking the leap, evaluating some new options. Doing so will pay off big in the long run for the sake of your business growth!