A small or mid sized business that accepts credit card payments pays a small fee to the merchant card processing company for each transaction. This small fee adds up to a sizeable amount every month. Add to this the monthly statement fee, merchant account setup and other one-off charges; and you end up paying quite a bit to the credit card processing company. Though it is inevitable for merchants to pay for the convenience of credit card processing as it directly contributes to increased revenues, there are ways to reduce the merchant services fees.

Here are few tips to lower credit card processing costs and increase your profit margins:

Ensure transactions are processed within 24 hours

Credit card sales transactions should be batched out every day, within 24 hours of the sale. An older transaction will incur highercredit card processing fee. Avoid this eventuality

Reduce the monthly minimum charge

The contract with the credit card processor specifies a monthly minimum charge. In the event that your monthly sales fall short of this number, you pay the difference. If this happens too often, ask the credit card processing company to lower the monthly minimum value. Most credit card processing companies will negotiate seeing your past sale records. If they don’t, there are other agencies that will be more than willing to help you out.

Print the business contact on customer receipts

Businesses usually have customers sign a receipt for a credit card transaction. This is a proof of sale that customers keep in case of chargeback or any other issue. Ensure the credit card receipt shows your business address and contact number, and not the credit card processors contact information. In case of any query, the customer should call you. If they call the credit card processing company, you will be charged for  information retrieval.

Ask for reduced merchant services fees

Nobody is doing any favors by extending credit to customers. Each time a customer uses a credit card, the card company makes money. By accepting credit cards, you are in fact generating more business for the merchant  services credit card processing company. Ask for cheap credit card processing rates in exchange for the business you generate for them.

Avoid card less transactions at the store

If your business location has a card swipe machine, avoid card less transactions. The rate of credit card transaction fees increases with the risk involved. Manually keying in credit card information also results in higher risk. Swiping cards through the processing slots incurs the cheapest credit card processing fee. If the magnetic strip of a credit card is damaged, ask the customer for an alternative credit card. Usually, customers will carry more than one card. If not, you have no choice but keep this practice to a minimum.

Review monthly statements carefully

If you have had a long relationship with the credit card processing company, there is likelihood that they may have hiked rates at some time. You can only know this by reviewing monthly statements minutely. Ask questions about downgraded transactions and unexplained fees. If there are too many of these, consider switching to another credit card processor.

They key to reducing credit card processing rates is to be aware of  these simple tips, being knowledgable of the current merchant card processing fees in the market and negotiating with the credit card processing companies to get the best deal. Always be on the lookout for credit card processing for small business offers that suit your needs, sales volume, and type of transactions.

Tags: Credit Card Processing

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