If you’re like most businesses, one thing you know about your customers is that they seldom carry cash. Whether you’re a web-based company that has no choice but to take payments by card or a brick-and-mortar store with cash capability, most of your payments are probably card based. That means that credit card processing fees are a major business expense. Like credit cards themselves, not all accounts are created equal, and fees can vary greatly from business to business. If you don’t secure the lowest rates possible, you could lose thousands in profits every year. Here’s what you need to know about negotiating with your credit card processor for lower rates:
Work Your Connections
Many trade organizations and local business groups have deals with credit card processing companies to offer their members discounts. Make sure you’re taking advantage of every price break you’re entitled to. You may also be able to get a lower rate if an existing customer of a processor refers you. Let them know who suggested their services and request a matching rate.
Know the Competition
Your credit card processor doesn’t want to lose your business, but other companies want to gain it. Use this to your advantage during negotiations. Let your current credit card processor know that you have a better offer on the table, and give them a chance to match it. Be precise about what the other company is offering you so your existing provider knows exactly what the stakes are.
Understand All the Fees
For every credit card payment, you’ll be charged a processing fee and a transaction fee. Some companies offer low processing fees but hit you with high transaction fees. Be sure to include both fees in your negotiation so your processor doesn’t make up the reduced rate they give you on one fee by overcharging you for the other.
Although it’s possible to fight for your own rates, small business owners can get better results with an experienced negotiator on their side. At Merchant Advocate, we help small businesses beat overpriced credit card processing fees every day. Call us at (732) 727-2073 and start saving money now.