5 Credit Card Processing Fees To Look Out For

Any business has many fees, credit card processing fees are some of the fastest growing fees and really add up, if you are not careful. Here are just a few fees to look out for:

Leasing Fees

Many credit card processing companies offer credit processing equipment leases, however, the leases can be expensive. A standard machine typically sells for $300.00 or so. A lease, however, can end up costing $1000.00, or more. Terminals can be purchased inexpensively at auctions. Seek out refurbished units because they can provide significant savings.

Discount Rate

The discount rate is the amount of money the credit card processor will charge you on each transaction. The problem with discount rates is that they have to be split between several parties. The interchange rate, or rate the credit card issuer charges to accept their card, and the money the credit processor earns are generally lumped into one fee. Part of that discount rate goes to the card issuer, and part of it goes to the credit card processing company. You have the right to request the information regarding where your money is going, so arm yourself with knowledge to avoid paying unnecessary fees.

Minimum Fees

Most often credit card processing companies will charge you per accepted card. Track the cards you are using, if after a few months, you see that there are certain card types you don’t see a lot, it would be better for you to stop accepting those cards all together.

Higher Rates for Certain Cards

The per transaction fee is based on the credit card you are accepting. The rates are somewhat determined by the card issuer. Your company will add the card processing fees on top of the consumer fees. The card issuers will always sell you the use of their cards, but telling you that accepting their cards will bring you more revenue. Be careful because it depends on your customer base. Consider your customer base when you set up your account because you can lose money.

Small Business, Higher Fees

If you have a smaller business that doesn’t generate a high volume in credit card sales, your discount rate and monthly rates will be higher. The good news is that these rates are almost always negotiable. Find out what tier structure each company has,  if they have one, and see if you can move between the tiers with ease. You can find locked rates that won’t be based on the number of sales you generate if you look around.

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