How to Lower Payment Processing Costs Without Switching Processors
Most businesses pay more than they need to for card processing. Before you take on the work of switching processors, there is usually money to recover with the one you already have. Here is where to look.
Where your processing fees actually go
Every card transaction carries three layers of cost. Interchange is set by the card networks and paid to the bank that issued the card. Network fees are assessments charged by Visa, Mastercard and the other networks. The processor markup is what your processor charges on top.
You can't negotiate interchange or network fees, but you can influence how your transactions qualify for interchange. And because the markup is set by your processor, it can be reviewed and renegotiated.
Six ways to lower costs without switching
Read your statement line by line. Identify every fee, what it is for, and whether it has changed. Many businesses have never seen a clear breakdown of what they pay.
Check your pricing model. Interchange-plus pricing passes interchange through at cost and shows the markup separately. Tiered or bundled pricing makes it harder to see what you are paying and often costs more.
Qualify for lower interchange. Send complete transaction data, such as address verification and, for business cards, Level 2 and Level 3 data. Settle batches promptly so transactions don't downgrade to higher rates.
Remove junk and duplicate fees. Question monthly minimums, PCI non-compliance fees, "non-qualified" surcharges and fees for services you don't use.
Reduce chargebacks and downgrades. Clear billing descriptors, good receipts and prompt refunds reduce disputes and the penalty fees that come with them.
Renegotiate the markup. Bring your processing volume history and, if you have them, competing quotes. Processors would usually rather adjust pricing than lose a merchant.
When switching does make sense
If your processor won't move on pricing, can't support the payment types your customers want, or its service is holding your business back, it may be time to look elsewhere. Working through the steps above first means you'll know exactly what you need and what fair pricing looks like.
Talk to GranitePay
GranitePay reviews processing statements, finds savings, and helps businesses and software platforms negotiate better terms with the processor they already have.
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