What affects a business’s payment processing fees? These variables make a difference.
These days, it is harder than ever to run a profitable business without having a credit card processing system. Especially with the popularity of online transactions, the only viable way to process payments is through a customer’s credit card. Payment processing does not come free, however. Each business must pay a percentage of what the customer gives them for the credit card processing service, and this cost comprises several fees. The variables of payment processing fees make this cost higher or lower.
Variables of Payment Processing Fees
Interchange Fees
Interchange fees are the percentage that the customer’s credit card company charges to the recipient’s bank to reduce the cost of potential fraud. Any credit card transaction comes with a certain level of risk, and companies like Discover, Mastercard, PNC, etc., try to compensate for any loss they might experience.
Payment Processor Fees
Every business that uses a credit card payment processing service needs to have a merchant account with a payment processor. To make money, the payment processor will charge a fee for each transaction. This fee can be split into multiple fees that are monthly, per transaction, for equipment, and more.
Credit Card Processing Type
How the credit card transaction takes place also changes how high or low the fee is. Did the transaction take place with the customer swiping the card at the store? Did it take place on a website or over the phone? However the customer paid with their credit card will carry more or less risk, and with more risk, there is a higher cost.
You Can Lower Your Payment Processing Fees!
Each payment processor will offer different payment processing plans from which to choose that can suit smaller or larger businesses. Remember that your fees are negotiable; it is also possible to lower or eliminate fees altogether. Also, be on the lookout for fees that rose without a notification. Keeping track of your payment processing fee history can save you more than you think.
Pure Finance Group can help your business set up financing for customers as well as do a deep dive into your payment processing setup. We help businesses lower their credit card processing costs by 10-100%! If you believe you could benefit, don’t hesitate to reach out.
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