For most small business owners, the terms “merchant fees” and “credit card processing rates” sound like heavy words. However, these two factors can have a major impact on your bottom line. Since we know that every dollar counts, it pays to know all the ways you can reduce your merchant fees and credit card processing rates.
Here are 5 ways to reduce your merchant fees and credit card processing rates:
1) Choose a low-cost processor
2) Contact your issuing bank to see if they offer discounts for using their cards
3) Negotiate with your current processor for fewer fees
4) Consider alternatives such as Square or PayPal
5) Sign up for online payment services such as PayPal Here
Choose a low-cost processor
One of the easiest ways to reduce your merchant fees is to choose a low-cost processor. For instance, if your processor offers e-commerce, mobile, and EMV transactions, you will incur higher fees for each of those services. If you choose a provider that only offers e-commerce and EMV transactions, you will pay less.
You can also negotiate with your current processor for fewer fees. You may have to pay more in the short-term but it could save you money in the long-term. If you are considering alternatives to traditional credit card processing, Square or PayPal are both worth looking into.
Contact your issuing bank to see if they offer discounts for using their cards
For the most part, your issuing bank will not be able to offer you a lower merchant fee for accepting cards from their bank. However, they may offer other perks such as discounts or rebates to incentivize you to use their card. For example, you may receive a percentage of the cost each time someone uses their card, or a percentage of the transaction fee.
If you’re a small business owner who only accepts a few types of cards, this perk may be worth your while. For example, if you only accept Visa and Mastercard cards, you may be eligible for exclusive discounts on those cards. The important thing to remember is that every merchant account provider is different. So, it pays to do your research and find the best option for you.
Negotiate with your current processor for fewer fees
One of the easiest ways to reduce your merchant fees is to negotiate for a better contract. For instance, if you have a high monthly fee in exchange for a low per swipe fee, consider asking for a lower monthly fee in exchange for a higher per swipe fee. This way, you’ll pay less in monthly fees but more per swipe.
Alternatively, negotiate to have your monthly fees waived if you don’t use your card reader too often. If you’re only swiping cards two or three times a week, consider asking your merchant account provider if they can waive your monthly fees if you don’t swipe more than a certain number of times a month.
Whatever you do, don’t be afraid to negotiate!
Consider alternatives such as Square or PayPal
With the introduction of Square and PayPal, many small businesses are now looking for alternatives to their current credit card processing service. Square and PayPal are two great options for small businesses.
Square is a mobile credit card processing option that can be used by anyone with a smartphone, tablet, or computer. The Square reader plugs into your phone or tablet, then you can take payments anywhere. You can also process payments online through their website. Square charges 2.75% plus 15 cents per transaction with no contract.
Sign up for online payment services such as Paypal Here
If you want to offer your customers the ability to pay online, but don’t want to deal with the rising rates of credit card processing, consider signing up with a web-based payment service.
PayPal Here is an online payment service that can be used anywhere. You can sign up for this service for free and pay lower processing rates depending on how much you process each month.
PayPal is a popular choice for small business owners because it offers a wide range of services—from accepting online payments to handling your accounting to issuing invoices.
Here are a few of the perks that come along with PayPal:
There are no monthly fees
It’s easy to get started
There are no hidden costs
Accept payments from nearly anywhere
No additional fees from your bank or credit card company
PayPal provides fraud protection and dispute resolution