Ways to Decrease Your Merchant Fees

Have you taken a look at your merchant statements lately and wonder how your fees became so high?

Its’ not uncommon… with the introduction of new rates and assessment fees from the card brands, many Acquirers have taken this opportunity to revise their merchant fees and if you’re not careful, you could be paying more than you need to.  Here are a couple of ideas to help lower some of your fees.

Figure Out What You Are Being Charged Each Type of Credit Card Transcation

First of all, take a look at the card mix of transactions you are processing and know that even though you have a set merchant discount rate, that may not be the actual rate you are paying for your transactions.  Merchant discount rates are typically set for “electronic transactions”.  These are transactions that are processed electronically, either mag or chip, in a card present environment on a basic customer credit card.

Premium Credit Card Transactions

Transactions on Corporate cards, premium cards and international cards all carry a higher interchange fee to the Acquirer from the Card brand… and the Acquirer will typically pass through that difference to the merchant in the form of a “non-qualified” fee.  And keep in mind that almost 40% of the public now have a premium credit card due to the attractive points systems they offer.  Another item to note is cards that are manually processed or keyed in through the terminal are considered as “standard” transactions and also carry a higher interchange.

Keyed in Credit Card Transactions

All keyed in transactions are subject to the non-qualified fee.  Are you constantly keying in your customer’s credit card because it either won’t swipe or your terminal is down? May be time to consider upgrading your terminal.  Also, keep in mind that once you go EMV and a chip card is presented, you won’t be able to key that transaction in… it must be processed through reading the chip and if the terminal cannot read the chip, you will need to ask for another form of payment.

Negotiate Your Credit Card Processing Fees

Once you’ve reviewed the transactions you’re taking, look at your account as a whole and contact your Acquirer to see what other options you have.  Perhaps you are paying a high monthly rental fee for a terminal that has functionalities you don’t need.  There may be a lower cost option for you.  Based on your volumes, contact other Acquirers to get quotes on discount rates.  You can negotiate.  While the Acquirer is not obligated to adjust your rates if you are still in a contract, it doesn’t hurt to try.  Plus, find out what the cancellation fee is.  Sometimes, if your account is big enough, other Acquirers will consider paying out your cancellation fee to win over your business.

Consider Other Merchant Account Providers

And finally, you can research to see if there’s a merchant association you could join.  But you must do your math with this. Merchant Associations have membership fees and you need to work out the difference in savings you will get by receiving the present associations rates versus the actual membership fee.  A membership fee could cost upwards of $500… if you’re not going to save at least that in your fees, it may not be worth it.

A little bit of homework and reassessment could save you hundreds of dollars in the long run.

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