5 Strategies to Reduce Credit Card Processing Fees

For many businesses, accepting credit cards is essential due to customers’ preference for convenient payment options. While credit card processing fees are a necessary cost, there are steps you can take to save thousands of dollars monthly on these fees. Here are five strategies to consider:

Negotiate with Credit Card Processors: Engage in discussions with your credit card processor to secure the best possible deal. As your business grows, ensure you’re still receiving competitive rates based on your transaction volume. Demonstrating value as a merchant can enhance your negotiation position. Processors often have the flexibility to adjust rates based on transaction volume, so increasing your sales can lead to better negotiation outcomes.

Mitigate Credit Card Fraud Risk: High-security risks can lead to higher processing fees. Two primary ways to reduce security risks are prioritizing card swiping over manual entry and consistently inputting security information such as billing ZIP codes. Swiping cards lowers the risk of fraud associated with manual entry while providing security information that validates purchases and minimizes fraudulent transactions.

Utilize Address Verification Services (AVS): Employing AVS, a system that verifies the cardholder’s billing address with the card issuer, can further reduce fraud risk, especially for high-value transactions. AVS enhances security and helps prevent chargebacks, making it a valuable tool for e-commerce businesses. Visa and Mastercard support AVS globally, and in the U.S., Visa offers lower interchange rates for transactions with AVS checks.

Ensure Proper Account and Terminal Setup: Avoid higher processing fees by correctly setting up your account and terminal. Having an accurate account setup is essential from the outset, as incorrect information can lead to higher costs. Additionally, processing transactions promptly—within 24 hours—can reduce processing fees by minimizing the number of transactions processed.

Consult with Credit Card Processing Experts: Seeking guidance from credit card processing experts can provide valuable insights and potentially lead to lower fees, emphasizing that most processors offer the same rates to businesses of all sizes. However, negotiation expertise can help companies to secure lower fees without switching processors. Consulting with experts can uncover cost-saving opportunities and optimize processing fees for your business.