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10 Practical Ways To Avoid Extra Credit Card Processing Fees

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ElitesMindset Editorial Team
ElitesMindset Editorial Team
Suleman Siddiqui, an accomplished editor, navigates the realms of celebrity, lifestyle, and business with a distinctive flair. His insightful writing captures the essence of the glamorous world of celebrities, the nuances of contemporary lifestyles, and the dynamics of the ever-evolving business landscape. Siddiqui's editorial expertise combines a keen eye for detail with a passion for storytelling, making him a sought-after voice in the realms of entertainment, luxury living, and commerce.

Credit and debit card payments are the backbone of every successful online business. They’re platforms by which customers pay business owners, which in turn roll in the profits. However, there are numerous merchant fees to pay when every customer transacts through card payment. 

According to Bankrate, every business owner pays an average credit card processing fee of 1.5% to 3.5%. Examples include the Merchant Service Charge (MSC), gateway fees, PCI compliance fees, card-not-present fees, chargeback fees, and other administration costs. Fortunately, you can avoid these extra credit card processing fees when you’re observant about them. Here’s how to minimize the charges on your card payment systems. 

Purchase Payment Terminals 

A successful business entails agreeing with payment processors to access the terminals for transactions. Most people lease the terminals because the cost spreads over time instead of depositing a large sum. However, this leasing method can be counterintuitive and generate higher expenses in the future. Most available processors charge extra fees while leasing their credit card processing terminals. The situation worsens if you change processors because you’d need to start from scratch. 

Therefore, a brilliant way to avoid extra credit card processing fees is by purchasing the payment terminals instead of leasing them. This method allows you to handle every hardware and new system when faults arise. Furthermore, with leasing terminals, you save money on all extra costs that can arrive in the future. 

Pay Strict Adherence To PCI Compliance

Credit card companies require clients to sign Payment Card Industry compliance to secure third-party customers against internet fraud. To capture card payment information, you must ensure the client’s data and comply with all rules. Most processors demand you fill out a questionnaire to confirm you align with their standards. Some usually provide insurance and more guidance and charge extra monthly fees. Therefore, you must screen payment processors’ PCI requirements before using them. 

Asides from that, most credit card companies charge PCI noncompliance fees if you defy their standards. Avoid the extra charges by securing customers’ data properly and staying PCI compliant. Also, look for processors that help you comply with their standards. 

Limit Chances Of Credit Card Fraud 

Customer security during online payments is a crucial aspect that processors consider. Therefore, reduce the risks of credit card fraud to reduce extra charges. If your business involves high-risk merchandise, your payment processors will accrue higher processing fees to cover the costs. However, if you prove that your business has low chances of internet scams and credit card fraud, you can receive lower prices. 

Start by implementing better security measures in your business like using Swipe credit cards in place of keys, requesting CVV for card-not-present transactions, ZIP code in the billing address, using EMV card readers, and requesting security information before processing payment, and clearly stating a refund and return policy. Overall, these measures help to limit fraudulent situations and avoid extra card processing fees. 

Use Credit Card Surcharging 

Another innovative way to limit extra billings on credit card merchant payments is to surcharge. Surcharging is cutting out the card processing fees to your customers. Your customers pay an additional surcharge for any credit card transactions. For example, if the total payable amount was $20, then extra charges might increase to $20.33. However, one flaw with this method is state laws and regulations. Get every information concerning surcharging and sign all necessary documents to stay safe against every allegation. 

It’s always best to choose platforms with the lowest credit card processing fees like Nadapayments. They’re a reliable processor with an excellent surcharge program that creates a win-win situation for you and your customers. With their services, you’d keep 100% of credit card revenue and limit extra charges. 

Discover The Ideal Merchant Services Provider 

Finding the best credit card processor service can be a challenging decision. Consider the per-swipe card fees and payment structure before choosing one. Here are the prices you’d encounter when selecting a merchant service provider. 

Tiered Pricing

Tiered pricing is a method used by some processors to determine transaction fees; it divides business into three categories: qualified, mid-qualified, and non-qualified. Non-qualifying transactions charge higher interest rates than eligible ones.

The difficulty with the current system of compensation is that the categories are entirely subjective. What one processor considers “qualified” may be non-qualified by another. Because most processors don’t share how they classify transactions into different price tiers, there is also no transparency in the pricing structure.

Interchange-plus pricing 

And then there’s interchange-plus, a pricing model that splits the difference between the payment processor’s markup and the interchange rates (i.e., you can’t negotiate the fixed expenses). This technique is more open and honest since the business can see the special surcharge or percentage charged by their payment processing provider.

Flat-rate pricing 

The flat-rate price mixes the processor’s markup with credit card interchange rates, providing one flat cost that applies to all transactions. It simplifies processing expenses but usually generates higher than average retail interchange rates. This is because the average interchange rate is only 1.8%, whereas most flat rate fees begin at 2.6% for each transaction.

Subscription-based pricing 

With subscription-based pricing, you’re billed a set monthly amount in return for access to the actual cost of conversion. Since the service provider isn’t adding markups to your per-transaction costs, you may keep a more significant portion of your revenue.

Employ Address Verification Service 

An Address Verification Service checks to see if the billing address given matches the one associated with the cardholder’s account. If the information doesn’t match, the purchase will not process. Including this technology in your checkout process is a brilliant method to prevent credit card theft. There is an additional advantage as well. If the consumer later challenges the charge, documentation showing you have a complete AVS match will be very persuasive. This service helps to limit refunds and boost eCommerce businesses.

Seek Bulk Processing Discount Opportunities 

Success in avoiding extra credit card charges can also arrive when you carefully select the best discount processors. Screen the numerous options and choose services that can process high monthly sales volumes. Look for ones with flexible pricing offering schemes designed to boost your business. You can also avoid extra credit card charges by encouraging cash payments using incentives like discounts and offers. Choose a discount rate, and let customers save money when they pay with cash. For example, a product costing $20.33 will go for $20 with a cash payment. 


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