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How To Get Lower Credit Card Processing Fees

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How To Get Lower Credit Card Processing Fees

Lower Credit Card Processing Fees

Do you want lower credit card processing fees? If so, you’re not alone. There are thousands of business owners across the world searching for the same thing.

It’s something that drives me crazy about this business. There’s no reason that business owners should be treated this way.

Most credit card processing companies see business owners as a money piñata. That’s just bad business.

Reps go out to try and get the absolute most out of business owners who might not know the credit card processing industry.

It’s a game stacked against the business owner, and we’re here to turn the tables for you.

Lower Credit Card Processing Fees In Just a Few Steps

Let’s start off with the first thing you need to know if you want lower credit card processing fees. To get lower credit card processing fees, you need to find a new merchant processor.

If the current processor you use to accept credit cards is charging you too much, why in the world you would want to stay with them?

They set you up with the fees you have, and never told you the tricks to lower credit fees they could have given you. If your business accepts credit, make sure you’re working with a processor you can trust.

Many businesses will use a retail POS (point of sale) system to complete their transactions. A POS system is a payment processing system that accepts payment through a payment gateway.

POS systems differ from credit card terminals by including more than just credit card processing, like a drawer for cash management and inventory management.

Payment processing companies that use POS systems tend to be the preferred companies.

When a credit card transaction takes place on a POS system, the POS software will run the card through the card network and confirm the sale.

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In order to have lower credit card processing fees, look for a credit card processing company that has the following qualities and offerings.

1. Cost-plus pricing model

This is by far the most honest and transparent pricing model. The Cost-plus model gives you the exact interchange rate. (The rate charged by the credit card companies.)

The interchange plus pricing model tries to calculate what the total fee of the interchange plus the markup fee will be. A lower interchange rate would then save you, the customer, more money.

If Visa Mastercard or American Express charges 1% and $.22 to run a particular card, that’s how much you pay for the transaction made on the customers credit card. You also pay the plus (+) part of the overall cost-plus pricing model which pays the processing company their fee.

The card issuing bank and company get the profit from that transaction, no matter the type of transactions.

The merchant account that accepts credit card payments will then have to pay an interchange fee to the bank of the customer.

The fee to the processor is nominal and ends up being cents per transaction. This model gives you transparent pricing and you know where every penny is going helping you to receive the lowest credit card processing rates and fees.

2. Dedicated Customer Service Representative

When you need customer service help, you want someone who knows your business. Lower credit card processing fees won’t matter if the new company isn’t there when you need them.

What would happen if you had a chargeback on your account? Who would you call? Would you get a call center overseas or the person you spoke to who signed you up?

This might not seem like a topic worthy of the #2 spot, right? We hear that it’s the number one thing most business owners regret not checking before they sign up.

If you want the lowest fee credit card processing cost, don’t focus just on fees. You want to find a credit card processing company that gives you all the bells and whistles too.

3. Zero Fee Processing Pricing Model

Is there such a thing as a processing agreement where the business doesn’t pay fees? You bet there is, and you should go find it.

Most business types and their owners know about traditional processing models. What many don’t know about is a model that has the customers pay your fees for you. It’s called Zero Fee Processing, and you can get it.

What would it be like to add back in all the credit card processing fees like pertransaction fees that your business pays each month? Would that make a difference to your bottom line? I bet it would, or you wouldn’t be reading this article right now.

If you want to add that 3-4% back to your bottom line, it takes just an email to get started.

4. Month-to-Month Contracts

If you’re looking for a Cost-plus or a zero free processing company, watch for the contract. If they want you to sign a 3-year contract, it’s time to get up and walk out. They’re not for you.

The companies with low average credit card processing fees use month-to-month contracts.How can they do this? It’s because they know that they won’t lose you to another processing company.

Their rates are crazy low, and it’s not worth the effort for another company to poach your business and your business credit cards.

Month-to-month contracts give you the freedom to not have to worry about increasing monthly minimums. They allow you to get out of your contract if your payment processor or payment service providers are not meeting your expectations.

The great credit card readers and processors are sure of their pricing model and customer service. They know that once you’ve worked with them that you won’t be leaving.

Thus the monthly contracts. If you’re ever unhappy, you can leave at the end of the current processing month. It’s the perfect setup to make sure that they continue to earn your business.

5. Lower Your Fraud Risk

Did you know that the higher number of fraud reports on your processing account affects your rate?

When you ask a credit card processor to look at your business and your business finances, they’re assessing risk.

They want to know the chances that your business is going to process fraudulent transactions.

You can help lower your credit card processing fees by making sure that you swipe all your transactions.

You can also make people enter their zip code as an additional security precaution. Adding these simple security measures will lead to reducing credit card fraud for your company.

Keep your fraudulent transactions to a minimum, and your processing rate will follow suit.

6. Leave a “Tiered” or “Bundled” Pricing Model

If you’re currently processing on a tiered or bundled pricing model, you’re paying too much.

Tiered price plans are complicated and designed to keep the merchant confused. Why would you want to partner with a company that wants you to be confused?

Tiered and bundled pricing plans are ripe with places to hide fees for the processor.

Take out the trash and find yourself a processor that has a free processing or cost-plus option to help reduce credit card processing fees, and virtually remove all hidden fees. Your bottom line will thank you.

Find a company without a high processor markup or increasing processor charges.

7. Read and Calculate your Monthly Statement

You’ve seen your monthly credit card processing statement, right? You know, that envelope you open just scanning to the bottom line each month? Did you know that all you need to know about your current processor is sent to you every 30 days?

You can break down exactly how much monthly fees you are paying for credit card processing. Just take your total amount processed and divide by the transaction fees charged to get your percentage paid.

If the percentage that you get doesn’t match your quote, get angry. If you find that you’re like most businesses and your rates have been hiked, it’s time to change.

You have the ability to check each month to see if your processing company is being transparent.

Most credit card processing companies assume you won’t check your effective rate after 6 months. That’s when they usually hike your rates.

They can do it because there’s a clause in your contract that allows them to.

You’ll never know and they’ll be making off with your hard-earned money and actually keep you from saving money.

Lower Credit Card Processing Fees: The Next Step

Take a second right now and review your most recent statement. I bet you’ll find that you’re easily paying 1-2% more than you think you are.

The quoted flat rate or flat fee was most likely for “qualified” credit and debit cards, and when you process mid and unqualified cards you pay more.

It becomes less like fixed costs when you don’t know what you’re actually supposed to be paying.

We know that beginning a business can be stressful. You have to sort through countless business ideas, apply for business loans, decide whether or not you want to a website to allow your business to also be an online business that will accept online payment and so on.

We want to help ease the process for you at Dual Payments.

Find a processor that accepts credit cards as payment methods, but with lower fees. Less money spent on fees will allow you to grow your business at a quicker rate.

Your new merchant service provider, might also be able to help you with a business line of credit. Don’t be fooled though, you want a merchant service provider that knows card processing, not just business or personal loans.

You will have more financial flexibility if you get the right processing partner. Financial help comes in less fees every month, and over time it can easily be hundreds of thousands of dollars.

If you find that you’re being taken advantage of, it’s time to switch. You need to find a company that’s transparent and provides incredible customer service. You need a company exactly like Dual Payments.

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Example of High Risk Merchants

  • 1-900 Phone companies – If you’re the type of company that charges people to have a chat on the phone, you’ll be considered high risk.
  • Adult Bookstores – Clearly a part of the adult entertainment industry, and an easy mark for the high risk tag.
  • Adult Entertainment – Any business labeled with the “adult” descriptor will automatically be assigned a high risk status.
  • Adult Toys – As “adult” is in the name, it’s an easy target for association with the adult entertainment market.
  • Airline Industry – Due to cancellations on high ticket purchases, this will put your airline company in the high risk category
  • Amazon Stores – By having a high rate of return, Amazon stores are seen as high risk.
  • Ammo Sales – Association with the weapons industry guarantees high risk status.
  • Annual Contracts – Any time an annual contract is involved it can be considered highrisk because most consumers forget they signed up and chance of chargeback can be high.
  • Antiques – With a high average ticket per item, antiques are considered a risky merchant type.
  • Astrology – The study of the celestial bodies and the influence on human affairs can be a chargeback target if customers feel like they aren’t getting the answers they want.
  • Auctions – Because of the nature of bidding on a product and not having a set price the risk level goes up.
  • Autographed Collectables – There is almost always a question as to whether an autograph is authentic, and therefore chargebacks are much higher in this industry.
  • Automotive Brokers – Brokers of automobiles have a very high average ticket are are therefore of higher risk.
  • Bankruptcy Attorneys – Since the people who are working with bankruptcy attorneys are usually in financial trouble, the odds that a payment would be charged back is higher.
  • Betting Services – In many states betting is illegal but for the legal states betting with a credit card has huge chargeback implications.
  • Brokering – When a third party is involved with selling a product the risk level goes up ten fold.
  • Business Loans (Merchant Cash Advances) – Loaning money is always risky, but with business loans and startup lending, high risk is present by the nature of the business.
  • Casino – Just like a betting service, if a customer gambles with their credit card the chargeback rate sky rockets.
  • CBD Products – CBD itself poses high chargebacks because of the legitimacy of the product and the health benefits promised.
  • CBD E commerce – CBD E Commerce has twice the charge back of retail CBD because many consumers don’t feel like the product they receive gives them the benefits promised.
  • Check Cashing (Check Processing) – The level of fraud in check cashing and cash advances is what gives this industry a higher risk consideration.
  • Cigarettes – With higher levels of risk for theft and criminal activity, cigarette sales are deemed high risk.
  • Collection Agencies (Collection Agency) – Many banks see collections as an unsustainable business model that is many times unreliable.
  • Collectible Coins – A higher level of chargeback in this industry gives it a high risk tag.
  • Collectible Currency – Due to the level of inauthentic collectibles, the risk of chargebacks are much higher with collectibles.
  • Copyrighted eBooks – When someone sells something copyrighted without permission many legal issues can arise.
  • Coupon Programs – With many coupon programs the coupons expire and once they expire the consumer wants the money back they spend.
  • Credit Counseling – Due to their clients usually being in financial problems, this industry is fraught with non-payment and fraud.
  • Credit Protection – Most people that need credit protection are bad with money so chargebacks abound.
  • Credit Repair – If a consumer needs credit repair then chances are they are a high risk for chargebacks.
  • Currency Sales – Many businesses that exchange currency do it at incorrect rates hence more chargebacks.
  • Dating Services – Dating is a volatile industry, and is also lumped in with the adult entertainment industry, making it a high risk account.
  • Debt Collection Services – As the collection of debt isn’t always possible, this industry retains the tag of risky.
  • Debt Consolidation Services (Debt Consolidators) – Consolidating debt is a challenging business and as debt is usually the problem, it’s seen as unsecure from a payment perspective.
  • Debt Repair Services – Since the clients of debt repair services are usually having financial challenges, it makes this industry seem a higher risk.
  • Discount Health Programs – Many people don’t feel they are really getting a discount so they try to get their money back and if they don’t the chargebacks sky rocket.
  • Discount Medical Care Programs – Just like the discount health programs if they don’t save the consumer wants their money back.
  • Drug Paraphernalia – Anything that is associated with the drug trade is considered high risk. Offshore merchant accounts are commonly used for this type of business.
  • E Commerce – As the source of the payment is unverifiable at the point of sale, any transaction without the card present has a higher risk of credit card fraud.
  • Ebay Stores – Many people sell items that aren’t as described so chargebacks can be an issue.
  • Electronic cigarettes – much like traditional cigarettes, e-cigarette sales are also deemed high risk.
  • Electronics – This industry has a much higher ticket compared with many other businesses. A chargeback for a $3,000 tv or two and your account can be in jeopardy rather quickly.
  • Escort Services – This is deemed a part of the adult entertainment industry and therefore needs a high risk merchant account and payment solution.
  • Event Ticket Brokers – If a customer buys a ticket and doesn’t use it they feel like they can charge the transaction back.
  • Extended Warranty Companies – Warranties are rarely used so people try to charge back the money that has been spent paying for them.
  • Federal Firearms License Dealers – Any organization associated with guns or firearms is automatically considered in this category.
  • Fantasy Sports Websites – Just like gambling, if a person starts to lose too often they try and charge back the transaction.
  • Finance Brokers – The entire financing industry is risky. By simply extending credit to other individuals, this business is betting that a majority of them will actually pay what they say they will.
  • Financial Advising/Consulting – The high risk tag on financial advisors isn’t about the advisors or their firm. It’s about the clientele and their current circumstances.
  • Financial Loan Modification Services – Due to a clientele in financial struggles, the high risk term is applied to any payments in this industry.
  • Financial Planning – Anything that includes risk for the consumer can have consumer implications with chargebacks.
  • Financial Strategy – Another risk and reward category, if money is lost, consumers try charging back making this a high risk industry.
  • Fortune Tellers – When a person doesn’t hear what they want to hear, or what is told doesn’t happen, the fortune teller can receive huge chargebacks.
  • Furniture Sellers – High risk only when its custom furniture.
  • Gambling – If money is lost the chargebacks rise.
  • Gaming – Chargeback levels skyrocket when consumers don’t win.
  • Get Rich Quick Programs – It’s rather common in this industry for an individual to purchase the training and then chargeback their purchase saying it didn’t deliver on what was promised.
  • Google Stores – With a high rate of return on their items, Google stores are considered high risk.
  • Gun Sales (Firearm Sales) – The gun and projectile industry is automatically associated with high risk credit card processing.
  • High Average Ticket Sales – With any high average ticket, just a couple of chargebacks can mean a massive shift in how risky the account is deemed by the processor.
  • Home/Vacation Rentals – Many issues with chargebacks can take place if the consumer decides not to travel.
  • Horoscopes – Many people believe this is hocum so will chargeback transactions.
  • How To Programs – A common practice in this industry is to purchase the program and charge it back with the description that it didn’t deliver what it promised.
  • Hypnotists – Many merchants will charge back these transactions if results they hoped for were not met.
  • Import/Export Business – Another example of taking goods over country borders which automatically brings in additional risk to any processing account.
  • Indirect Financial Consulting – When using a third party to consult, the high risk status gives the processor fraud protection.
  • International Cargo – Any time you introduce a multi-country element to credit card processing, the ability for fraud to be introduced skyrockets.
  • International Merchants operating in the US – Since the merchant isn’t operating from the United States, there are many unknowns about what is happening on the other side of their business, thus increasing the risk.
  • International Shipping – Transporting goods between countries is risky and introduces all sorts of elements to the financial stability of any transaction.
  • Investment Books – consumers get upset if the investor isn’t right which can lead to chargebacks.
  • Investment Firms – As investments are never a “sure thing” this is considered a risky industry for having a merchant account.
  • Investment Strategy – Anything with future promises can lead to chargeback.
  • Knife Sales – weapons of any kind are automatically given high risk status.
  • Kratom E Commerce – Accepting payments online is high risk, and Kratom is a substance in the health and wellness industry, which is also considered high risk.
  • Life Coaching – With no tangible goods involved in the transaction, life coaching is considered high risk.
  • Lingerie Businesses – Associated with the adult entertainment industry, chargebacks abound.
  • Lotteries – In most states you can buy lottery tickets with a credit card but if you’re allowed to and the ticket is not a winner, consumers try to chargeback the transactions.
  • Magazine Sales – Many magazine sales are recurring subscriptions, which can have issues with chargebacks.
  • Magazine Subscriptions – Same as magazine sales chargebacks can be huge when a recurring subscription happens. (often referred to as recurring billing.)
  • Mail Order Companies – When something is ordered through the mail chargeback risk can go up.
  • Marijuana Dispensaries – As marijuana isn’t a legal substance in every state, this is considered high risk due to the legality of the product. Cannabis credit card processing is available through Shift Processing.
  • Matchmaking Services – Another branch of the dating tree, and often associated with the adult entertainment industry.
  • Medical Devices – If a medical device doesn’t do what’s promised the purchaser may chargeback the transaction.
  • Membership Organizations – This is another instance of where the transactions don’t have any tangible product and are easily charged back to the merchant account.
  • Merchants on the MATCH list – If you are a merchant who has been reported to the MATCH list (Member Alert to Control High Risk Merchants) or the TMF (Terminated Merchant File) you are given high risk status.
  • Merchants with Poor Credit – Merchant accounts are given based on the credit score of the business owner. It’s assumed that the business owner is going to be making the financial decisions for the business, and a poor credit score reflects on the viability of any business transactions.
  • Modeling Agencies – At many agencies models are promised the world and it doesn’t happen. The consumer then wants their money back.
  • Movie Downloads – Transference of a digital product is considered of higher risk. Also, rarely is a physical card present at time of purchase.
  • Multilevel Marketing Sales – Often associated with pyramid schemes, MLM sales are considered a risky business.
  • Music Downloads – Purchasing any digital product is considered to be of higher risk than a physical transaction. Most of the time the card is not present in a digital transaction using a shopping cart.
  • Not A US Citizen Doing Business In The US – It’s possible to get a merchant account without a US social security number, but not having a SSN will increase the risk the processor will have in issuing a merchant account for your business.
  • Online Adult Membership Sites – If you’re running a website that is adult themed and requires payment for access, this is a highly volatile account and definitely high risk.
  • Offshore Corporations (Offshore Merchants) – The international element is what gives the high risk tag when looking for domestic merchant accounts.
  • Online Gambling (Online Gaming) – Without a card being present and gambling as the activity, there are two reasons why this would be on this list. Online payment alone is risky even without the gambling element.
  • Overseas Exporting Services – The introduction of the international element is what gains access to this list.
  • Pawn Shops – There’s a general stigma that goes along with pawn shops, and it’s reflected in their assignment to the high risk processors list.
  • Penny Auction Sites – Even though the customers are usually bidding at only a penny more per bid, users will commonly charge back the transaction when they don’t win.
  • Pepper Spray – Considered a type of weapon, pepper spray vendors are considered risky.
  • Points Programs – Points programs that cost money can cause chargeback issues if points are not used.
  • Pornographic Merchants – If you’re a part of the adult entertainment industry in any way, you’re considered high risk.
  • Precious Metals – Counterfeit metals can be a problem in this industry, making it more risky to accept payments for.
  • Prepaid Calling Cards – Anything prepaid that a consumer may not use increases chargeback issues.
  • Prepaid Debit Cards – When they expire or are lost consumers want their money back.
  • Psychic Services – “Honey, did you visit a psychic? No babe, I don’t remember visiting a psychic.” I’ll just reverse that charge then.
  • Real Estate – A common target for scams and identity theft is how real estate makes this list.
  • Replica Products (Watches, Handbags, Wallets, Sunglasses, Etc…) – As the product being sold isn’t authentic to the original manufacturer, the percentage of requests for refund is much higher than a traditional merchant.
  • Rewards Programs – If rewards are not spent, the consumer wants the money back.
  • Self-Defense – Since the payment provided is for instruction and not a physical product, the self-defense industry makes this list.
  • Self-Hypnosis Services – Yet another instance where the goods being transferred are of a service and not a physical product.
  • SEO Services – With a high rate of request for refund, SEO agencies make this list.
  • Social Networking Sites – Just like a dating site, if a consumer does not get what they want from it, they always like to chargeback.
  • Software Downloads – The software industry makes their way on to this list because of the digital nature of the goods being sold.
  • Sports Forecasting – An example of paying for information and not for a product, and usually not in person where the card would be present for the transaction.
  • Startups – Every startup is considered risky, and the percentage of startups that make it is quite small compared to the number that fail.
  • Student Loans – With the cost of a college education continually on the rise, so is the percentage of loans that default and never receive payment.
  • Strip Clubs – Associated with the adult entertainment industry gains the strip club access to this list.
  • Stun Gun Sales – considered a type of weapon, which makes it a high risk merchant.
  • Supplement Sales – The request for refund in this industry is quite high due to the nature of the product.
  • Sweepstakes – “Hey, I entered a sweepstake and I didn’t win. I’d like my money back please.”
  • Talent Agencies – “I paid thousands of dollars for headshots and glamorous outfits and I haven’t gotten any paid gigs. Pay me back my money please.”
  • Telemarketing Services – Telemarketing services many times do not have the results the purchaser would like to see, so the services are charged back.
  • Telephone Order Sales – Anything ordered over the phone has a increased risk of chargeback.
  • Timeshare Companies – When timeshares aren’t used, people want their money back.
  • Travel Agencies – If trips are not taken, consumers would like their funds returned.
  • Travel Clubs – Many travel club discounts aren’t what they were promised, increasing risk for chargebacks.
  • Vacation Rental Brokers – Third party brokers on prepaid vacation can have issues when customers cancel their trips.
  • Vape Shops – The level of criminal activity and theft is higher with vape shop merchants and therefore carries a high risk label.
  • Vitamin Sales – If the vitamins don’t provide the results the merchant would like to see they chargeback the transactions.
  • Web Designer – Because this service is prone to chargebacks, it has been classified as high risk.
  • Weight Loss – Considered risky because the results aren’t really up to the company, but rather the individual has to stick to the plan to get results, often resulting in chargebacks.
  • Yahoo Stores – Since the goods sold through Yahoo can easily be returned, they are considered a risky merchant.

Turn Your Residuals into Immediate Cash Today

Selling your residuals doesn’t impact your merchants—they’ll keep processing happily. So, if you need extra funds, explore a credit card residual buyout. It’s fast, easy, and a smart move for your financial game plan.