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How Are Credit Card Rates Determined for Your Business?

Last updated 6 years ago

The days when most people made store purchases with cash are long over. In today’s fast-paced consumer culture, making a purchase with a credit card has become the norm. Every time a customer buys something with a credit card, your business pays a credit card processing fee. In addition to the financial impact of the fees, this often means being obliged to raise your prices—which runs the risk of alienating customers.

If you are trying to determine the effect that credit card fees are having on your business, consult this guide to how the rates are determined:

  • In the United States, there are more than 500 different types of credit cards, each of which has its own non-negotiable rates for processing. The vendor is responsible for paying these charges every time a transaction is made using the card. These charges compose about 90 percent of a business’s total amount of credit card processing fees.
  • Merchants also pay regular dues and assessments—either on a daily or monthly basis—for the use of credit cards. These fees are used by credit card companies to set rules and prices, continue research into new technologies, and pursue their own marketing and branding goals. These charges are also non-negotiable.
  • While these fees may not be negotiable, there are other charges that are. Managers, sales representatives, acquiring banks, and independent sales offices will all add their own fees on top of existing credit card rates in order to make a profit and cover their own cost of operation. A skilled negotiator can find a way to argue for the best credit card rates possible for your business. 

At Merchant Advocate, we will work to ensure that you get the credit card expense reduction you deserve. Our experienced analysts have the know-how necessary to negotiate for the lowest fees available. Call our office in Jersey City, New Jersey, today at (732) 727-2073 to find out more about our cost-reducing services.


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