Are You Paying Too Much for Credit Card Processing?

You need to accept credit cards to earn more revenue, but you need to earn more revenue to accept credit cards. That’s the thought that might pass through the minds of some merchants when they add up all the fees on their processing statement. However, credit card processing doesn’t have to be expensive. And if it does seem pricey, it’s likely because you’re overpaying. Here are some tips to help you save that hard-earned money:

Know Your Pricing Structure

The easy part of understanding your pricing model is that there are only three main models: flat, tiered and interchange plus. The difficulty comes in knowing the true cost of each, because some payment processors will go to great lengths to conceal it from you.

The structure you should look for is interchange plus. Other pricing models mix and match various types of card rates and, considering there are 470+ of them, there’s a good chance you’re overpaying. With interchange plus, you pay the interchange cost plus a small margin (a certain number of basis points and a transaction fee). That’s it — no buckets, no hidden fees and, best of all, the margin stays the same even as your volume goes up.

Review Your Contract Terms

It’s fine to enter into a contract with a payment processor, as long as you understand the terms. For example, you should never lease your equipment, because it’s more expensive than buying it outright. You should also be cautious of expensive equipment offered to you for free, because you’ll practically always be charged for it (sometimes extra) in a form of some other credit card processing fees.

Finally, be sure to review your cancellation terms. Many merchants get surprised when they are charged for cancelling early, overlooking the fact that the cancellation fee is usually mentioned in their contract.

Understand Your Statement

Statements can get confusing, but that’s exactly what some processors are banking on. While you can take the time to learn how to analyze it yourself, it’s always better to let credit card processing professionals who deal with them every day do it for you.

At TransNational Payments, we conduct free statement analyses for hundreds of merchants each day. Contact us to see if you are already in a great position or find out how much you can save with us.