May 9, 2022


With the start of the new quarter, every business is exploring ways to cut down costs and optimize efficiency. A great place to start, without having to compromise on the customer journey, is by minimizing your credit card processing costs.

Credit card processing can be a significant cost for most businesses. Even though it seems like a smart percentage, the costs can start pilling up quickly. Especially for businesses with thin margins, optimizing credit card processing costs is essential to increase profitability and attain sustainable growth.

This article will explore the ways your business can minimize credit card processing costs by shifting to better solutions.


More Payment Acceptance Methods

The biggest mistake that most businesses make is that they work with a credit card processor without extensively negotiating their rates. To put yourself in the best position to negotiate, you need to establish your value as a merchant.

You can highlight aspects such as transaction volume, repeat customers, and conversion rate to make a strong case for a lower processing fee. Remember the fact that even a small decrease in your processing fee will make a significant long-term difference. To strike the perfect deal for your business, carefully evaluate your existing requirements, including transaction volume and business risk. Having a good sense of your needs can help you get the desired results in a negotiation.

Comparing the quotes between different options can also be a great way to shop for the best deal. Explores the rates of different B2B payments companies and choose the one that offers the best package for your business.

An experienced partner can simplify your negotiating by handling the process for you to get you the best terms. Look out for a company that can help you in the implementation to ensure that you get the best credit card processor for your business.

Implement a Surcharge

The simplest way to manage credit card processing fees is by passing them on to your customers. This saves you the hassle of factoring in payment fees and helps you focus on business management. Before adding a surcharge, make sure you extensively review the rules and procedures to stay compliant with existing guidelines. With expenses increasing after the pandemic, surcharges are becoming a common way businesses manage their costs.

Reduce Risks of Fraud

Fraud risk is a common reason why credit card processing companies charge a high processing fee. The best way of reducing credit card risk is by using the swiple mechanism as frequently as possible. This is because brands like Mastercard, Visa, and UnionPay charge a higher fee when the payment details are manually entered into the system. Automated payments simplify the process with faster processing and reduced risk.

You can also minimize your risk of fraud by providing additional security details to protect cardholders. Adding a billing ZIP code is an effective way of managing risks. Even though these seem like a small nuisance, adding in these steps could make a significant difference in minimizing your costs. To take a step further in reducing fraud, consider opting for an address verification service that verifies the customer’s billing address with the card issuer. The fraud-management tool takes the verification to the next level and goes the extra mile in preventing chargebacks.

During the checkout process, customers enter their billing address which is then compared to the on-file address with the issuing bank. Once the comparison is completed, the merchant receives an AVS code that can be used to accept the transaction. Both Mastercard and Visa offer global AVS support to simplify management for businesses. You can also get a lower interchange rage when you perform AVS checks on transactions.

Shifting to Level 3 Processing

Level 3 Processing offers a great way for companies to optimize costs on B2B transactions. The transactions include a higher level of detail about transactions and satisfy the requirements for lower base cost. This is because the extra information prevents the likelihood of fraudulent transactions compared to others that simply include name, date, and charge amounts. The transactions were devised to prevent excessive government spending and now allow businesses to have detailed information that is passed to the bank statement. Based on the nature of the card, different interchange fees are charged on different card types.

You can explore a shift to level 3 credit card processing to minimize credit card processing fees. To become a level 3 processor, you need to accept purchasing cards, corporate cards, and government spending accounts issued by Mastercard and Visa.


Comply With PCI Guidelines  

The Payment Card Industry (PCI) data security standard is a set of rules defined for companies to protect sensitive credit card data. Credit card processors allow businesses to become PCI compliant in 2 to 3 months after starting eCommerce operations. After this initial period, merchants have to pay an additional non-compliance fee on a monthly basis.

By optimizing your operations and shifting to PCI compliance, you can avoid the extra fees and mitigate the threat of non-compliance. Many PCI providers offer breach payouts of up to $1 Million as a way of insuring your website in the event that your customer data is compromised in any way. Shifting to PCI compliance can save you significantly on the monthly fees and act as a way to enhance customer trust.