Credit card merchant fees can seriously affect your business’s bottom line. Many companies accept these fees as a cost of doing business, but there are easy ways to reduce these costs. Whether you’re looking for better ways to process payments or considering passing fees on to customers, reducing these costs can significantly improve cash flow.
In this guide, we’ll break down practical, actionable strategies so your business keeps more money while staying compliant with the regulations around merchant fees.
5 Ways to Lower Credit Card Merchant Fees
1. Choose a Payment Processor with Flat-Rate or Transparent Pricing
Some payment processors have hidden fees that can quickly add up, including these common fees:
- Batch fees: Charges for grouping your transactions for processing.
- Monthly minimums: Fees that apply if your transaction volume doesn’t meet a certain threshold.
- PCI compliance charges: Fees to ensure your business meets security standards to protect customer payment data.
To avoid these surprise costs, look for a payment processor that has transparent pricing. Platforms with transparent pricing are often a better choice for credit card processing for small and medium-sized businesses because they help you avoid unexpected costs and plan your finances effectively.
You can also look for flat-rate models, where all fees are bundled into one predictable charge. This way, you won’t have to worry about unexpected charges sneaking up on you.
2. Encourage Lower-Cost Payment Methods like ACH or Debit
Both ACH (Automated Clearing House) and debit card transactions offer lower fees than credit cards, but they can serve different purposes.
- ACH payments are ideal for larger transactions or business-to-business payments since they typically involve a flat fee instead of a percentage. This can lead to significant savings on high-value sales, and the fee is usually lower than the percentage-based fees associated with credit cards.
- Debit card payments are better for everyday consumer purchases because their processing fees are generally lower than credit card fees.
Tip: You can make ACH and debit card payments more appealing by offering them as the default payment options on online invoices and in customer payment portals. Services like Chargezoom’s Customer Portal allow customers to compare different payment methods, giving them the flexibility to choose their preferred payment option without delaying paying you.
3. Start Using a Surcharging Program
The simplest and most effective way to reduce credit card merchant fees is to start using a surcharging program. This means passing the costs of credit card processing fees onto your customers instead of absorbing them yourself.
Some business owners might hesitate to adopt surcharging because of concerns about compliance. The truth is that surcharging is perfectly legal when done correctly. Major credit card companies like Visa and Mastercard have clear rules to make sure surcharging is transparent and fair to your customers.
If you want an easy way to manage surcharging without the risk of breaking any rules, Chargezoom can automate the process for you, making it simple and hassle-free. This way, you can have customers cover the fees without worrying about GAAP compliance issues.
Find out more about eliminating merchant-paid credit card fees with ultra-easy surcharging from Chargezoom.
4. Review Rates with Your Payment Processor
Have you ever looked closely at how much you’re shelling out for payment processing? Did you know that the fees charged by payment processors are often negotiable? Banks and processors may be open to lowering their rates, especially if you’re processing a high volume of transactions. You might be able to score a better deal by simply asking.
To renegotiate fees, you might need to make several calls, review contracts, or even threaten to switch to a competitor before you can get a better rate. This can be a time-consuming process but could save you money in the long run.
Tip: You can also ask your payment processor how you can take advantage of lower processing fees by using Level 2 and Level 3 data handling. This kind of data handling describes transactions in painstaking detail, which lowers the risk of a chargeback. This could cut your rate by as much as half. Or, better yet, you can get a flat rate with Chargezoom and eliminate the hassle altogether.
5. Set Minimum Transaction Amounts for Credit Card Payments
One of the issues with credit card processing fees is that they often charge a flat fee and a percentage per transaction. For smaller purchases, this flat fee can end up taking a larger chunk out of the revenue than you’d like.
How much do credit cards charge merchants? The short answer is: it depends. Credit card processing usually ranges from 1.5% to 3.5%. This percentage is influenced by bank charges, credit card network interchange fees, and payment processing fees.
Tip: By setting a minimum purchase amount for credit card payments, you can avoid paying excessive fees on low-value transactions.
The Smartest Solution: Chargezoom’s Zero-Fee Surcharging
Merchant fees don’t have to drain your profits. With the right strategy and tools, you can reduce—or even eliminate—fees altogether.
Chargezoom offers a powerful tool that allows businesses to pass credit card fees to customers automatically and in full compliance with industry standards. This feature makes it easy to:
- Offset credit card fees with automated, compliant surcharging—eliminating invoicing discrepancies or line-item editing..
- Offer ACH and debit card payments to enable quick payments in your customer’s preferred payment method.
- Automate invoicing and reconciliation to avoid costly errors.
With Chargezoom’s surcharging solution, you can accept credit card payments without paying the fees—so you keep 100% of every transaction. Get started today.
