For many businesses, accepting credit cards is a necessary method of collecting payments. And unlike cash, credit card payments cut into the profitability of a sale. It’s left many businesses wondering what they can do to keep their fees as low as possible.
- Whenever possible, swipe. Have you ever been to a store where—if your card doesn’t read the first time—they attempt to run it two, sometimes three, more times before finally key-entering the card number? This is because key-entered transactions incur higher processing rates than if the card is swiped. You save money when you swipe.
- If you must key-enter your transactions, enter everything. Ever skip through the fields for Address, Zip, or CVV? Each time you skip something, you miss out on potential cost savings. The more info you enter, the more you ensure the lowest possible rate associated with that particular transaction. So, in addition to the usual card information, make a habit of also obtaining the billing address, billing zip code and the security (a.k.a. “CVV”) number associated with each card.
- Get PCI Compliant. These days, most merchant processors offer some kind of PCI validation process. Basically, PCI Compliance (PCI stands for “Payment Card Industry”) means that you’re following the rules and procedures set forth by the major card issuers; mainly, that you’re securely handling, processing and disposing of sensitive cardholder information. The PCI Certification program usually carries a fee (anywhere from $90 to $165 annually); however, the fee is quite more if you are not compliant. For example, the average non-compliance fee is in the ballpark of $20 per month (in addition to the annual program fee). Certifying your compliance could save you approximately $240 per year.
- Consider a minimum transaction amount and/or a cash discount. Due to recent federal legislative changes originating from the passage of the Durbin Amendment, businesses may now impose some restrictions on how they accept credit card payments. This includes providing discounts for those paying with cash. It also includes setting a transaction minimum for credit card payments. Obviously, this won’t work for all businesses. But nevertheless, it is an available option.
- Ask your processor for a rate evaluation. If your credit card sales have increased significantly since the time you originally opened your merchant account, you may be eligible for a rate review. All this requires is contacting your provider and asking them to review your activity.
Unfortunately, there’s no way to escape all of your credit card processing fees. However, following the five steps listed above ensures you’ll pay as little as possible.