There are several penalties associated with credit cards that can add up to hefty costs should you miss a payment, go over your spending limit, or engage in any other unusual activity.
Consider the numerous expenses you may incur so that you can minimize or avoid them entirely. There are methods that may even lead to zero-fee credit card processing.
Avoid manual entry:
This is likely a circumstance you’ve encountered before. Some cards won’t swipe, therefore after a few tries, the card information is manually entered into the system as this is not mobile payment processing.
Processing rates are highest for transactions entered by hand. There is a greater danger of fraud because many of these transactions are done card-not-present.
As far as possible, avoid entering data manually if you’re accepting cards in person. If the card isn’t being swiped, find out if the customer has another form of payment.
Cut down on credit card fraud:
There is credit card fraud. It’s also the enterprises that have to bear the brunt of this.
Your business is hit with an additional fee of $15 to $50 every time one of your customers challenges one of your charges (plus loss of the sale). Your business could lose twice as much money in a single fraud lawsuit than it makes in a year’s sales.
When fraud can be prevented upfront, it’s always preferable. Here are a few suggestions which lead to zero-fee credit card processing:
- With a photo ID, you can verify your customer’s identification.
- Consider using an address verification service (more on this in a moment).
- The CVV security code should be requested.
- Encourage the use of mobile wallets
- PCI compliance must be maintained at all times.
Another motivation to reduce fraud exists. If you have fewer chargebacks, you have more leverage to get cheaper rates from your payment processor. More on that in a moment.
Negotiation:
There is a way to zero-fee credit card processing in which some fees can be negotiated, but you need to know which ones.
Businesses consider avoiding mobile payment processing fee but in the case of credit card interchange rates, there is no way to lower them. Anything that the supplier can influence, however, can be negotiated. Included here are:
- Markup applied by the processor
- Monthly or annual fees
- Cost for using a virtual terminal or payment gateway
- Fees for renting equipment and assembling displays
- Payment Card Industry Data Security Standards (PCI) compliance costs
Negotiation success depends on having a high-value customer. The more sales you generate, the greater your negotiating leverage will be. You should get in touch with us if your business has developed since you first signed up.
Encourage debit card payments:
Because debit cards have a lesser risk of fraud, they lead to zero-fee credit card processing. Card networks typically charge between 1.7% and 2.5% for credit card transactions, compared to 0.5% to 0.7% for debit card transactions, on average
The cost of a debit card is a mere $0.10, compared to the cost of a credit card, which is $0.40, for a $20 purchase. In the long run, it will make a big difference.
Keep in mind that setting a debit card minimum is against the law. You can, however, give a discount to encourage customers to pay with debit or cash.