- On May 9, 2019
Launching a small business can be both exciting and overwhelming. A reliable credit card processing solution is a necessity for any business that accepts card payments. Unfortunately, merchant fees can add up quickly. Here are a few tips to help your small business save on payment processing fees.
Shop Around For The Best Pricing
Selecting the right merchant services partner is the easiest way to protect your company’s bottom line. Pricing structures vary greatly from vendor to vendor. Some charge a percentage of each sale while others use a tiered system or a subscription-based model. Analyze your business to decide which fee structure makes sense for your unique needs.
Should You Lease Your Credit Card Terminal or Buy?
Equipment purchase prices and lease terms can fluctuate depending on the provider. Calculate the long term costs for both options. Leasing will cost less initially but may cost more in the long run. Buying your credit card terminal outright can save money if you are planning for the long term. If purchasing your terminal, add a protection plan that will cover you for damage and repairs. After all, your business will be using this piece of equipment quite a lot!
Set a Minimum Amount on Credit Card Transactions
When your customer pays with a credit card, you are charged a merchant services fee to process the payment. For very small transactions, this fee may wipe away any profit. Set a $10 minimum amount for charges to help mitigate your transaction fees and encourage customers to spend more money.
Use Best Practices to Keep Fees Low
There are several steps you can take to keep your transaction fees as low as possible, starting with eliminating two money-draining practices: multiple batching and manual charges.
Does your processor charge a batch fee each time you send daily transactions to the bank? If so, avoid extra batch fees by batching no more than once per day.
Manual charges generally cost more than chip-based transactions. Reason being, many processors charge more when there’s a higher likelihood of an error. Have your customers insert their card into your terminal when possible.
When it comes to secure payment processing, knowledge is power. Research the terms of your merchant services account to avoid surprises on your statement. Your credit card processing solution should provide a stress-free payment experience for your buyer. Customer satisfaction leads to more sales and, ultimately, higher profits for your small business.