Below are ten ways you can lower your credit card processing fees. Many factors cause your monthly statements to be higher: card present versus card not present, improper transaction habits, PCI compliance, the environment that you process in, and sometimes just having the wrong processor.

Consumers love purchasing goods and services with credit cards and that is only expected to increase year over year.  Business is booming, as they say! But what does this mean for you, the merchant? Increased credit card use could mean increased processing fees that can cut into your bottom line. Here are strategies to help your business drive those fees down.


Know Your Effective Rate

Your first line of defense in wrangling your processing fees is to know what you are paying. Start by knowing your effective rate which will tell you how much money you are spending every month on credit card processing.

Here is a step by step guide to calculating your effective rate.


Read and Understand Your Statements

If I had a nickel for every time a merchant told me they don’t read their statements or that they don’t get statements, I would be rich.  By knowing how to read these statements you can ensure your fees haven’t increased without your knowledge or that you are being billed for something unknowingly or inaccurately.

Did you remove something from your merchant account but are still being billed for it? If you can’t read your statement, how would you know?  Call your merchant service provider and ask for help.

Here at NXGEN, we make it a habit of scheduling time with all our new customers to go over their first statement so our clients can easily review upcoming statements.


Get PCI Compliant

Getting PCI compliant will eliminate non-compliance fees. Also, it will protect you from expensive credit card fraud, hacking, and various other security issues.  Did you know that 75% of breaches occur in small to medium size businesses? Most business owners underestimate the reputational risk and financial impact of data breaches. When more than 50% of all small businesses that are breached go out of business within the first six months, it pays to be PCI compliant!

By following the rules set forth by the Payment Card Industry Council (PCI-DDS), you are helping to cut down on credit card fraud and protecting yourself as well as your customers.

At NXGEN, we provide our customers peace of mind with up to $250,000 in breach coverage.


Pay attention to The Total Sales Amount

Only paying attention to the money that is deposited into your account is not best practice. Sure, the processor is putting money into your account every day, week, and month, but how much was taken out before the deposit? Where did all of the total sales amount go? Not all processors or statements are created equal. Some statements are designed to hide fees and make it impossible for even skilled credit card professionals to see where the money is going.  A trustworthy processor and merchant service provider will clearly state all fees and tell you what everything on your statement means and what each line item is for. If your processor and merchant service provider gives you the brush off “don’t worry everything is on there,” it is time to find a new processor.


Swipe or Dip When You Can

Anyone who has ever swiped or dipped a credit card vs. typing in the card information is aware that it is much easier and faster to swipe & dip the card then to type it in. But did you know that key-entering card holder information costs more per transaction? Why does it cost more? Because in the credit card world the transaction itself just became “risky,” since the card is being key entered and not inserted into a payment device. That means there is a chance this could be a fraudulent charge. When you have the option, choose to swipe or dip compared to key entering in credit card information.


Don’t Skip Prompts from the Payment Device

Did you know that every time you skip a prompt from a payment device such as the zip code or CVV number your transaction will cost you more?  If the customer cannot provide the prompted information or your employees skip these to speed up the checkout process, it will costs you additional money per transaction.  The increased cost is because less card information increases security risk.  The higher the security risk you pose to your processor, the higher your processing cost is per transaction.  .

If your customer is the card holder and present during the transaction, they should be able to provide that information for you.  Your customers may not like additional questions or the slightly longer checkout time, but I promise you, if you state this is for their protection they will understand the couple extra seconds.


Batch Out Every 24 Hours

Keeping transactions in your payment solution too long can also cost you extra. Getting into the habit of having your payment solution batch out or settle every 24 hours can help save money. The longer a batch is left in the payment device, the costlier it becomes; this is called a downgrade. By leaving transactions in your device for long periods of time, you are exposing yourself to dispute risks.


Negotiate with Your Processor

That’s right, I said it; you can negotiate with your processor. You may not always win, but you can at least try.  Your processing volume will help you with your discussion with the processor. The more you process, the more value you bring to the processor, thus making you a valued asset to keep.

Areas where processors can generally lower fees:

  • Monthly Fee
  • Transaction Rate
  • Batch Fee
  • Payment Solution Fee

Areas where processors cannot lower fees: (These fees are set by the card brands, not the processor)

  • Interchange Fee
  • Card Association Fee


Get a Statement Analysis

Everyone loves a good deal and having a statement analysis done every so often is another way to lower your credit card processing fees. You can contact your merchant service provider for an annual review, or you can get an analysis from competitors.  Things change, as does pricing and options, make sure you are up-to-date and that your pricing is current.

Keep in mind; a good deal should not be your final decision maker. If you have been in business for a couple of weeks or a decade plus, I am sure you have been hounded by sales reps willing to lower your credit card processing fees.  Here is a secret, it’s true that all sales reps can save you money as they race to the bottom. However, not all sales reps or providers can provide best in class payment solutions and quality customer service.

The important question to ask yourself is, am I happy with my processor or provider? Do they take good care of me and my business? Do they offer superior payment technology to grow with my business? Some things are worth paying for.  Sure this new processor may save you $200 a year on your processing but will they charge you extra if you call their customer service team? Will you be able to speak with a live customer service rep or be forced to deal with merchant issues via email? Are you getting the latest technology and the right payment solution for your business?


Expand & Grow Your Business

I know, that is easy for me to say but like I mentioned in the Negotiate with Your Processor section, the bigger you are, the more a processor is willing to work with you.  Have you thought about expanding your business globally by adding a website where people can purchase your products outside the US?  Has your company increased its volume since you started processing? Bring this to your merchant service provider’s attention.


If you are interested in having a free analysis done or would like to speak with a dedicated NXGEN Agent, please contact us today.