5 Quick Tips to Big Credit Card Processing Savings
This article covers 5 quick and easy things that you can do to save money on your merchant account and credit card processing fees.
Taking five minutes to clean the magnetic strip reader on your credit card processing machine can save you big on processing charges each month. The magnetic strip on the back of a credit or debit card holds information about the cardholder that a credit card machine reads when the card is swiped through its reader.
In order to get the lowest possible rate processing rate, the credit card machine must be able to read all of the data from the card's magnetic strip. If the machine's card reader is dirty, it may not be able to read all of the data properly or at all. The transaction may still be approved, but it will be charged at a higher interchange rate. Keeping the magnetic card reader in your credit card machine clean will help ensure that you don't overpay for processing.
Switch from tiered pricing to interchange-plus
About 70% of all merchants that process credit cards are utilizing a tiered pricing model. Tiered merchant account pricing is a more expensive model than the more transparent interchange plus model that's now widely available.
Take a look at your credit card processing statements. If you see charges for "qualified," "mid-qualified" or "non-qualified transactions" - you're processing credit cards on a tiered merchant account pricing model. Switching to interchange plus pricing can save you as much as 25% or more each month over tiered pricing.
Have monthly minimums waived
Especially in the case of businesses with seasonal swings, a monthly minimum adds substantial expense to your processing bill. The monthly minimum is the amount that your merchant service provider will charge regardless of your actual processing volume.
For example, if your merchant account has a $25 monthly minimum and your actual processing charges for a given month are only $15 - you would incur an additional $10 charge just to bring your total monthly charges up to the $25 minimum amount. Calling your processor and having this fee removed from your merchant account will save you money in any month where you don't hit the minimum fee.
Have monthly "junk" fees waived or reduced
Merchant service providers make much of their profit on fees other than actual processing charges. Even if your merchant account is based on the lower interchange plus pricing model, you may be getting overcharged with additional "junk fees."
Monthly junk fees go by many names such as a statement fee, customer service fee, Discover network fee and more. Call your merchant service provider and ask them to run through your statement with you over the phone or in person. As they mention fees, ask what they're for. If it's a junk fee - insist that it be lowered or removed from your account totally.
Have annual fees waived
Annual fees are similar to the junk fees mentioned above, but they can be even more expensive. There's absolutely no reason for a merchant service provider to charge a merchant account annual fee. You may be paying an annual fee for your merchant account without even realizing it because the fee won't appear on every statement. It will only be listed on the statement for the month in which it is charged.
Take a look at the schedule of fees that you received when you opened your merchant account and scour it for an annual fee. If you don't have the schedule of fees, call your merchant service provider and ask about an annual fee. If you're being charged and annual fee - insist that it be waived.
Article Tags: Credit Card Processing, Credit Card Machine, Merchant Service Provider, Credit Card, Card Processing, Magnetic Strip, Processing Charges, Card Machine, Pricing Model, Merchant Account, Interchange Plus, Monthly Minimum, Merchant Service, Service Provider, Actual Processing, Junk Fees
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This article to help businesses get a cheap merchant account and more helpful information about merchant accounts and interchange plus pricing is available at MerchantCouncil.