Credit card processing

How to Lower Your Startup’s Credit Card Processing Fees

Almost every business accepts credit cards and every business owner has complained about credit card processing fees and rates. As an entrepreneur, surely all you want to do is lower your credit card processing fees. But how do you successfully do so?

You could spend endless phone calls, emails, statement comparisons and discussions trying to negotiate a better rate and lower fees, which might be impossible. Even with interchange pricing, business owners still pay approximately 3 percent for every credit card transaction.

Are there other options to lower credit card processing fees?credit card processing

By taking advantage of a surcharging program, you could virtually eliminate all of your credit card processing fees.

A surcharge is an additional service fee that a merchant adds to a consumer’s bill when he or she uses a credit card for payment.

How does surcharging work?

You have the ability to add a small service fee to each credit card transaction through a surcharging program. A fixed percentage is added to every credit card sale and is clearly noted on your customer’s receipt. When a business implements a surcharging program, the service fee applied helps to supplement the cost of acceptance.

For example, let’s say your customer’s credit card transaction is $50. A typical surcharging fee is 3.25 percent. Your customer would pay $51.62 with his or her receipt showing a $1.62 service fee. As a business owner, that $1.62 will help to cover your credit card processing fees.



Are there any surcharging rules?

There are some rules when you decide to take part in a surcharging program. Those include:

  • Cash, debit, EBT and PayPal transactions are ineligible for surcharging programs
  • You must inform your customers that you surcharge prior to the purchase with signage at both the point of entry and the point of purchase
  • Surcharging is allowed in 40 states throughout the U.S., excluding Maine, Florida, California, Colorado, Kansas, Massachusetts, New York, Oklahoma and Texas
  • The surcharge fee cannot exceed 4 percent, must be the same for all accepted brands and cannot be greater than the fees you pay to your processor

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How do I implement a surcharging program?

Inform the card brands (example: Visa and MasterCard), as well as your merchant services provider that you want to implement a surcharging program. You need to give written notice at a minimum of 30 days before you begin to surcharge.

First, reach out to your merchant services provider. They may be able to reach out to the card brands on your behalf. Your merchant services provider may also provide you with the correct surcharging equipment, as well as the required signage you need to provide at the point of entry and point of acceptance.

When implementing a surcharging program, keep in mind it is only for credit cards, not cash or debit transactions. To review, surcharging virtually eliminates credit card processing fees by saving your startup money on every credit card transaction.

Content provided by International Bancard

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