Accepting credit cards is a must in today’s world. Not only do they boost sales, but it also legitimizes your business. However, there are a few fees involved when it comes to accepting credit cards, which can eat away at your profits if not managed correctly. This is why it’s important to compare credit card processing fees amongst providers—so that you can find the best one for your business.
Before comparing fees, keep in mind that there are certain factors to consider when comparing credit card processing fees, like industry customization, platform integration, volume processing, and the potential security risks involved.
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Below is a brief summary of the three most important payment processing fees and the factors that go into each.
These are fees incurred whenever a customer uses their credit or debit card to purchase something from your store. Interchange fees will be charged to your merchant bank account, and it’s important to remember that these fees vary based on perceived risk, current interest rates, and the like. As such, larger and more established businesses with a high transaction volume are able to shoulder high interchange fees that smaller businesses may not be able to shoulder.
As the name suggests, flat fees mean that your business is charged a flat rate for all your transactions, regardless if they are done in-store or online or what kind of credit card was used. These fees are typically charged as a percentage of the purchase amount. Smaller businesses prefer to shoulder flat fees since they can figure out how much they’re paying with every single transaction.
Tiered fees mean that your processor will charge you different interchange fees depending on the levels of risk associated with your transactions. The lowest rates are for businesses that have the least risky transactions, such as those that allow for swiping credit cards versus typing out credit card PINs. While each processor has its own way of calculating your tier, this option can be especially useful for businesses with a repeat customer base.
If you are eager to start your business and interested in learning more about credit card processing, check out the cheapest credit card processing options at Processing Card today.
Florence Carpenter is passionate about ensuring that the process of opening merchant accounts is as straightforward as possible. She graduated from the University of Michigan with a bachelor’s degree in Marketing.
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