As a small business owner, you may sometimes feel that credit card processing fees are a necessary evil to running your business efficiently.
Let’s be honest, without the ability to accept your customer’s plastic, you will probably lose sales from those would-be customers who don’t carry cash. But not to worry. There are several ways you can save money on your small business credit card processing fees with a few tricks of the trade.
To help you find the best rates possible that will fit your business needs and help you save money, we’ve compiled a list of 6 key points to be aware of before pulling the trigger on a processor.
1. Compare Prices
This may sound like a given, but make sure you check multiple options and don’t just go with one that sounds like a good deal. Remember, the cheapest option may not be the best and it may end up costing you more in the long run if it’s not as reputable. Another advantage to price shopping is that by having multiple quotes in front of you, you might also be able to get your preferred choice to lower their prices if you have other processor’s quotes in hand that are cheaper than theirs.
2. Credit Cards vs. Debit Cards
Did you know that it actually costs more to process credit cards than debit cards? Many businesses now are cutting costs by only accepting debit cards and reducing that per transaction processing fee. When a customer uses a debit card and their associated PIN, instead of running it as credit, the payment runs in an entirely different way than a credit card and reduces the per transaction charge. The advantage of this method is that it still allows customers the flexibility and freedom to pay with plastic, but helps the business save more by reducing those credit card processing fees. So before you go all in, and accept every form of payment, do a thorough analysis on what would be best for your small business and consider accepting some, but not all, payment methods.
3. Understand Compatibility
If you’ve already chosen the best fit POS system for your small business, check to see if the credit card processor that you are interested in is compatible with your POS system. There’s nothing worse than signing a contract only to discover afterward that it won’t work with your existing equipment. Make sure the credit card processor you choose works with your current equipment, or be willing to make changes to ensure you can integrate all of your necessary equipment and keep your small business running smoothly.
4. Know ALL the Fees You Will be Faced With
Most of your fees will be transaction based which may tempt you to focus solely on how much per transaction the processor will charge you, but it’s important to gather all costs you will be faced with. What are their monthly fees like? What type of plans do they offer? Is there a month-to-month contract? An annual contract? What type of fees (if any) will be incurred if you cancel? Will you get charged an extra fee for not using the processor a minimum number of times? Unexpected credit card processing fees can sometimes sneak in there if you don’t pay close attention before signing. Make sure you’ve covered every aspect of their terms so there are zero surprises when that first bill comes. If you don’t cover all your bases upfront, it could end up costing you more than anticipated, hurting your planned small business budget.
5. Read the Fine Print
Before you sign anything, make sure you’ve read all of the fine print so you aren’t stuck with a hefty bill later for something that could have been avoided. Do your transaction rates change based on the number of transactions you process each day? Does that low rate they advertise apply to all cards or only to select qualified cards? These types of fees can sneak in there if you’re not careful, so making sure you’ve read the fine print today can save you a world of headaches tomorrow.
6. Customer Support
If you have technical difficulties with your credit card processor, how easily accessible is their customer support? Does it come with the contract or is there an added fee for unlimited customer support? Are there only specific hours you will be able to reach out or will they be available 24/7? This may not seem like a big issue right now, but if your credit card processor ever malfunctions, this could end up costing you thousands if you have to turn away customers who don’t have cash. Make sure the credit card processor you choose has adequate customer support for your small business needs.
Ultimately, the most important thing is that you know exactly what it is your business is looking for. Don’t just go with the first processor you see because those small business credit card processing fees could end up costing you more than the good promotional deal that lured you in to begin with. The very first thing you should do is make a list of exactly what you want and then start comparing pros and cons of each processor. If you do it in this order, everything else will fall into place. Be thorough in your search, remember the 6 key points, and you will find that perfect processor for your small business.