In the 21st century, it’s hard for a business to not accept credit cards as a form of payment. However, for many small businesses, credit card processing fees can mean a significant reduction of their profits. While it may be impossible to avoid accepting credit card payments, there are some strategies small businesses can employ to help reduce the processing fees associated with such payments.
Here are some of those strategies:
Set a Minimum Purchase Amount for Credit Card Purchases
If someone purchases a product from your business for $1 using a credit card, the processing fees on that transaction are going to wipe away any profit. Adding a minimum amount, such as $10, for credit card purchases will help avoid these situations. The customer will either pay with cash, which would help you avoid the processing fees altogether, or they will spend more money to meet the minimum.
However, this may upset some customers who don’t carry cash and rely entirely on credit or debit cards to make purchases. To avoid this, you should evaluate your clientele and figure out a minimum purchase amount that will not drive away customers.
Stop Entering Credit Card Information Manually
If your business manually enters credit card information during transactions, you may be paying more in processing fees. Manually entered information has a higher incidence of fraud, and therefore credit card processing firms charge more for these transactions. Transitioning to a Point-of-Sale (POS) system that uses a swipe and/or chip technology can help drastically reduce these fees
Research Your Credit Card Processing Company Fully
There are a few different types of fees associated with credit card processing. The interchange fee, which is collected by the bank or company that issued the credit card, will be the same regardless of what credit card processor you choose. However, every credit card processing company charges its own fee on every transaction to make money. This fee will differ between processing companies. When looking for a credit card processing company, make sure you find out what their processor rate is and compare that to your other options.
Negotiate Your Credit Card Processing Fees
As we mentioned before, different credit card processing companies will offer different rates for transactions. But that doesn’t necessarily mean they are set in stone. Whether you’re evaluating a new processing company or re-evaluating your existing provider, you can always negotiate your processing fees. 80 percent of businesses that attempt to negotiate their credit card processing fees are successful, but less than 25 percent even try to negotiate. Take a shot and try!
Buy Your Own Credit Card Terminal
Many credit card processing companies allow you to rent a credit card terminal from them. While that may seem like a good idea, renting the terminal over time will be more expensive than simply buying your own from the start. Most office supply stores sell these terminals, and they generally range from $100 to $600. Don’t get tricked into renting a credit card terminal when you can buy your own!
Here at Accel Entertainment, we can help our customers lower their credit card processing fees. Thanks to our size, we’re able to work with our credit card processing partner to offer lower fees to our locations. On average, we save over $1,000 per year for our customers on processing fees. Contact Accel today to find out how you could be saving money on credit card processing fees.