Credit Card Processing Fees
Why Are Credit Card Processing Fees So Different?
Your friend, for example, runs a similar online business as you do, yet he pays only 3% discount rate or credit card processing fees while you are paying a hefty 5%. Or you may have seen ads touting 2% credit card processing fees, and think what’s going on here?
Any number of factors may make your fees higher, for after all they are based on things like the full amount of sales you experience per month, the average amount of those transactions, your own individual credit rating, how much time you’ve been in business in general and the length of time you’ve been in that same business, and of course, also the percentage of your sales performed specifically over the internet.
Also it may have to do with the type of business you are in, then combined with perhaps a poor credit rating. You see there are some businesses that are fraught with incidences of fraud, adult sites that require memberships, for instance. The combinations of various factors are difficult for us to imagine, as we are not in the business of being a credit card processing company. Also, remember that the monthly minimums frequently indicate that you will need to pay higher credit card processing fees.
Some companies, such as some banks, may insist that you maintain an account in that bank to process credit cards, and if you do not acquiesce to that particular stipulation, they charge you astronomically higher credit card processing fees. Though rare, it may have to do with the amount of money that the processor can hold back in your account. If you allow them to hold back more money, then you may find that that offsets the lower credit card processing fee.
Unfortunately too, a card processing fee may be lower than some others, but the processor has found ways to “nickel and dime” you so that in essence you are paying more fees than many of your friends and acquaintances in the same business. An example may well be by raising the cost of such things as high gateway fees, or exceedingly high statement fees. You also may encounter a fee called an address verification fee, though it will be small, it does add up in the long run.
Understand that the quotes you receive are actually customized for you, and your small business, home-based business or another type of business. Do not be afraid to negotiate any credit card processing fees you are presented with. As often as it’s stated in business, you’ll never know unless you try.
Another information: Inovation in Mobile Credit Card Processing.
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