The days of a “cash only” business model are no longer viable in the digital age. For business owners, this means providing their customers with a variety of payment methods in order to ensure continued growth and success. However, deciding which payment methods are best for your business requires considering several different aspects to setting up a payment processing merchant account and understanding credit card processing fees.
Step 1: Determine the Most Appropriate Equipment/Process Method
One of the biggest upfront costs associated with credit card processing fees can be the equipment. Equipment can vary, based upon the business, so you need to carefully determine whether you need to upgrade your equipment or if you can implement card processing with existing equipment.
For instance, if you already have a computerized POS system, is the system able to support EMV card readers rather than stand-alone equipment?
Step 2: Review the Terms, Conditions, and Fees on Contracts
Some merchant account providers might feature low upfront rates or other special incentives to get you to use their services, but, once these run out, your fees could double or even triple. On the other hand, other merchants might charge more for the account setup but offer lower transaction and processing fees.
Weigh these carefully and have any ambiguous wording reviewed by your accountant or a business lawyer to ensure you understand exactly what you will be charged. It can also be beneficial to negotiate on specific terms, conditions, and fees.
Step 3: Shop Around for a New Merchant Provider
If you are unhappy with the current fees you are paying, sometimes it can be worthwhile to find a new provider. Just be aware of any early contract termination fees with your existing provider. However, even with a termination fee, the savings you could gain by switching could outweigh the fee in the long run.
Step 4: Know the Difference Between Transactions Types/Fees
If you accept both credit and debit cards, encourage your customers to use the method that results in the lowest fees. This also requires educating your employees, so they understand when it is better to suggest debit over credit. Furthermore, you might want to set a minimum credit card charge limit to offset fees charged on credit transactions under $10.
Step 5: Use EMV Equipment
The safest transaction type is an EMV-chip-read transaction, and these tend to have the lowest credit card processing fees because of reduced fraud risks. If it is not possible to use EMV equipment with your business, look for alternative methods that are more secure than manually entered card transactions like mobile device card swipe readers.
Step 6: Review Statements
You would be surprised by how many business owners never take the time to review their merchant account statements. By reviewing your statements, it can help identify which types of transactions cost the most, as well as other fees you may be unaware you are being charged.
For assistance in setting up a merchant account or credit card processing equipment, or help determining the best card payment solution to use for your business, call Leap Payments at (800) 993-6300 now!
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