Any merchant who accepts credit and debit card payments is subject to unavoidable credit card processing fees. These fees are paid for each credit or debit card transaction, in addition to account fees and incidental fees. The key cost that merchants should pay attention to is the rate charged per transaction by a payment processor. The transaction rate is made up of interchange fees, assessment fees, and payment processor markup fees. Thankfully, some of these processing fees can be negotiated. Take a look at some ways that you can get a lower credit card processing rate on your merchant account.
1. Negotiate with credit card processors.
Merchant service providers are more willing to offer competitive pricing to merchants that add value. eCommerce businesses operate solely on credit card and debit card transactions, which means a high transaction volume. You can negotiate with merchant service providers by leveraging your transaction volume. The more transactions to be processed, the lower your credit card processing rate.
2. Reduce the risk of credit card fraud.
Certain industries are considered high risk. Businesses that fall under the high-risk category include those selling unregulated or poorly regulated products or services, and businesses with a higher risk of chargebacks. High-risk businesses often pay higher credit card processing fees than low-risk merchants. High-risk merchants have two options for fraud prevention. They can either swipe credit cards and input security information or work with a payment gateway. A smart way for high-risk merchants to lower the risk of fraud is to have customers validate the purchase by entering their billing ZIP code and security code.
Merchants who experience excessive chargebacks are placed on high-risk lists, or problems with payment processing or reserve funds can benefit from the help of payment litigation experts. High-risk business types are subject to significantly higher fees than low-risk merchants. It’s common for a merchant service provider to require high-risk merchants to maintain a rolling reserve depending on the number of chargebacks. Not all high-risk accounts require a rolling reserve, which is why it helps to work with a payment litigator.
Global Legal Law Firm has years of experience providing electronic payments litigation and commercial collections for ISOs, agents, processors, card brands, and in the realm of commercial collections. From MATCH List removal and TMF reserve funds to walking merchants through the application process, the law firm has the best interests of high risk merchant accounts at heart.
3. Set up your account correctly.
The best way to avoid paying higher fees is to set up your merchant account correctly. The business information you provide to a payment processor affects the type of fee structure you pay. The more accurate about the type of business, the type of transactions, and the frequency of transitions you are, the more you’re guaranteed to pay the lowest rate. You can also pay lower fees by setting up your payment terminal to process card transactions within 24 hours. This will reduce the number of transactions in a period and reduce processing fees.
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Business owners across all industries need to open a merchant account to accept card payments. The best way to avoid paying higher fees is to negotiate with payment processors, prioritize fraud prevention, and set up your merchant account correctly.
