Managing My Business, Growing My Business
Three Ways Your Small Business Can Save on Credit Card Processing
Date:23 June, 2017
Consumers are increasingly choosing plastic over cash. Declining to accept credit cards as a result of fees may actually cost you more money in the long run than the fees you are trying to avoid. Here are a few tips to help lessen the credit card fee pain your company may be experiencing.
Set a minimum spending requirement for purchases made with a credit card
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, all merchants are legally able to impose a minimum credit card purchase amount requirement up to $10, as long as the minimum is the same for all credit card issuers and PCNs (payment card networks). However, you should note this does not apply to debit cards. Setting a minimum purchase amount may help ensure small credit card purchases don’t eat away at your profitability.
Encourage debit card purchases versus credit card
If you’re a merchant who accepts both credit and debit cards, take the extra step to ensure those using debit cards select the debit option at the point of sale rather than credit. When consumers use a credit card, your business pays a 'swipe fee' that is a percentage of the total sale. However, the swipe fee on a debit card is generally a low flat fee. If your customer doesn’t care how their card is run, you should.
Keep a close eye on your data
Your best defense against unforeseen fees is to keep accurate records of your processing costs. Review your records regularly to evaluate the cost-effectiveness of your processing company. Don’t be afraid to negotiate. Armed with solid data, you can prove the value you bring to the processor and request a negotiated rate.