Last Updated on Mar 12, 2020 by James W


In a competitive economy, small businesses are finding it necessary to offer their customers several payment options, including debit and credit cards. Let’s face it, there’s no shortage of businesses online and offline offering a whole set of tools for simple payment processing such as mobile credit card readers, point of purchase equipment, virtual terminals and so on.

In order to remain competitive, a small business owner needs to provide convenience to customers, each of whom may be willing to buy goods and pay for them through different gateways.

According to a statistical report, 37 percent of small businesses said they relied on credit cards for fulfilling their needs pertaining to capital. Also, credit card purchases may account for 65 to 100 percent of a firm’s sales each year and a good amount of money in processing fees.

Here are some tips and pointers that will help you select and get the most out of a credit card processing solution for your company.

Avoid contracts that say long-term

Solutions accompanied by long-term contracts often have high fees for cancellation of services, and this can be pretty dangerous for smaller companies. If the provider is offering you a long term contract with a lower rate it’s recommended that you only agree to terms if they are willing to remove the cancellation fee.

Also keep in mind that there are several processors that will be competing to get your attention, so they just might be willing to make a few compromises to secure your business.

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Know what’s flexible

Before you get to negotiate the best processing fees with your credit card solution provider, you have to know where your money goes. There are some costs that even credit card processors don’t have control over; it is important for small business owners to gain knowledge in such areas.

One of them is interchange fees. What are interchange fees? These are non-disclosed fees charged by credit card associations (Visa, MasterCard, Discover and American Express) for businesses accepting credit cards. These fees vary depending on the type of transaction that occurs; whether a transaction takes place online or in a brick-and-mortar store, for example.

These and assessment fees can’t be negotiated, but credit card solution providers can negotiate the markup over assessment and interchange. The markup would be the place where you want to get lower costs.

Avoid purchase minimums

Purchase minimums can result in stress between a business and its customers. Credit card fees can make some transactions unprofitable when margins are low, but customers may not like purchase minimums and the restrictions that accompany them.

So you should try your best to avoid purchase minimum restrictions for customers, even if it requires you to price your products slightly higher. You can also encourage cash payments on minimum purchases. For example, you can enter any customer who pays by check or cash into a monthly lucky draw.

Avoid leases

The processor may compromise profit margins to get your business, and to compensate, they may try to lease you a machine, or raise the price of the software or equipment.

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Credit card machines are quite affordable compared to their prices a few years ago, so you can get a dual terminal device for roughly $500 mark. Any offerings beyond that should be an indication or price padding by the supplier.


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