As a business owner, you know how expensive it can be to accept payments. Although it’s important to be able to accept credit and debit cards in order to stay competitive in today’s modern market, it’s also important to make sure your dollars to being used in the most effective way possible for your business. That’s why understanding the fees that are often associated with credit card processing, what they mean, and what you do and don’t have to pay can have a big impact on your business.
There are some fees that every merchant must pay, but there are hundreds more that they don’t have to pay! Take a look at our breakdown below to learn more about these fees, what they’re for, and how to pick the right payment provider for your business.
The Unavoidable Fees
Before we get into how to avoid fees, let’s discuss the fees that are required in order to accept credit cards. Each credit card that you accept at your business has a cost associated with it that is set by the credit card providers themselves. This cost is called interchange and is required by all merchants that accept credit cards. Again, interchange is a non-negotiable fee that every merchant must pay, and the cost is based on the individual cards.
The only other unavoidable fee is whatever method your credit card processing provider chooses to use to bill for their services. Individual business owners cannot deal directly with the credit card companies. Instead, they need to set up a merchant account with a merchant services provider in order to accept any payment other than cash. These merchant services providers have a variety of ways they charge for their services, such and markups on top of interchange or flat monthly subscriptions. Either way, paying for the services of a third-party facilitator is the only other unavoidable fee associated with credit card processing.
The Avoidable Fees
When it comes to additional fees, there are hundreds that could be covered here. A lot of traditional merchant services providers rely on the fact that the average merchant isn’t going to understand or take the time to read their monthly statements. This leads to countless fees being added and thousands of dollars wasted each year!
Here are 5 of the most common, with simple ways to avoid them for your business:
Many business owners view credit card processing as an expensive, annoying, yet necessary evil – but it doesn’t have to be that way! Armed with the knowledge of what is required and what isn’t, you can now have more productive conversations with your provider in order to ensure you’re getting the best value for your dollar. If you find that you aren’t satisfied with their fee policy, consider taking the leap and evaluating some new options. It could pay off big in the long run for your business!
This content was originally published here.