Controlling Credit Card Processing Costs

Credit card processing costs can be a challenge to small businesses that operate on a thin profit margin. As more and more consumers use credit cards for routine purchases, the volume of credit cad processing transactions continues to grow, impacting the cost of doing business.

If you own a small business, there are ways to manage your merchant processing costs. The Better Business Bureau offers the following tips:

• Talk to your merchant processor. They should be willing to work with you to ensure you have the best deal possible.
• Install the latest software in your terminal or point-of-sale system.
• Properly train your employees to use the correct procedure and enter the required information when accepting cards. For instance, to avoid higher rates when accepting corporate, business or purchasing cards, they should always enter a customer code and tax amount when prompted by the terminal.
• Make sure your account is set up under the correct type of business.
• Batch each night to ensure that you qualify transactions at the best possible rate. Rates rise to a higher rate if the terminal is not closed out within 24 hours and rise even more if closed out after 48 hours. Set up auto-close if you or your employees are forgetful about batching.

If you believe it would be advantageous to switch merchant processors, do some research first. Whatever processor you select will have access to your personal and business information, so you want to choose with care.

• Check the processor’s track record with the BBB.
• Assess the helpfulness of their staff. Do they answer your questions promptly? What do other customers say about the business?
• Three important issues to consider are the length of the contractual commitment; how long it takes for funds to be transferred; and how charge-backs and fraud are handled.
• Fees tend to vary between providers and may be negotiable. Ask about set-up, cancellation, monthly minimum and any other fees. Once you understand the various fees, you can approximate what your total cost would likely be in a good month.
• Read and understand the entire contract before committing your business. Understand the terms of the agreement, the minimum charges and the termination clauses. If you have doubts, or the merchant pressures you for an immediate decision, trust your instincts and walk away.