Credit Card Processing Fees and Costs: Everything You Need to Know!

 Credit card processing fees and costs can seem confusing, but they don’t have to be! This guide will explain everything you need to know about credit card processing fees and costs so that you can make the best decision for your business.

What are Credit Card Processing Fees?

Credit card processing fees are the fees charged by credit card processors for the services they provide. These fees can be either fixed or variable, and they are typically a percentage of the total transaction amount.

Fixed vs. Variable Credit Card Processing Fees

Fixed credit card processing fees are set fees that do not change based on the amount of the transaction. Variable credit card processing fees, on the other hand, do change based on the transaction amount.

For example, a fixed credit card processing fee might be $30 per month, while a variable credit card processing fee might be 2.9% + $0.30 per transaction.

Credit Card Processing Costs

In addition to credit card processing fees, there are also credit card processing costs. These are the costs that businesses incur in order to accept credit cards.

Credit card processing costs can include things like merchant account fees, gateway fees, and PCI compliance fees.

Merchant Account Fees

A merchant account is a type of bank account that allows businesses to accept credit card payments. Merchant account fees are the fees charged by banks for setting up and maintaining a merchant account.

Gateway Fees

A gateway is a software that allows businesses to accept credit card payments online. Gateway fees are the fees charged by gateway providers for the use of their software.

PCI Compliance Fees

PCI compliance is a set of security standards that businesses must meet in order to accept credit card payments. PCI compliance fees are the fees charged by credit card issuers for complying with these standards.

What Are the Average Credit Card Processing Fees?

The average credit card processing fee is around 2.9% + $0.30 per transaction. However, credit card processing fees can vary depending on the type of business, the type of credit card, and the credit card processor.

For example, businesses that process a lot of credit card payments may be able to negotiate lower processing fees. And businesses that accept American Express cards may be charged a higher processing fee because American Express typically charges higher fees than other credit card issuers.

How to Reduce Credit Card Processing Fees?

There are a few ways that businesses can reduce their credit card processing fees.

One way is to choose a flat-rate processor. Flat-rate processors charge a single, fixed fee for all credit card transactions, regardless of the transaction amount. This can be a good option for businesses that process a lot of small transactions.

Another way to reduce credit card processing fees is to choose a processor that offers discounts for certain types of cards. For example, some processors offer discounts for debit cards and reward cards.

Finally, businesses can also reduce their credit card processing fees by negotiating with their processor. This is usually only an option for businesses that process a lot of credit card transactions.

The Bottom Line

Credit card processing fees and costs can be confusing, but they don’t have to be! By understanding the different types of fees and costs, businesses can make the best decision for their needs. And by choosing the right credit card processor, businesses can save money on credit card processing fees.

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