What are the best ways to reduce credit card processing fees?

1 Negotiate with your processor

One of the simplest ways to reduce credit card processing fees is to negotiate with your current processor or shop around for a better deal. Many processors offer different pricing models, such as interchange-plus, flat-rate, or tiered, and some may charge additional fees for services like gateway access, statement fees, or PCI compliance. You can compare the rates and fees of different processors and ask them to match or beat the best offer you find. You can also leverage your transaction volume, your industry, and your credit history to negotiate lower fees.

3 Optimize your security and compliance

A third way to reduce credit card processing fees is to optimize your security and compliance. This can help you avoid chargebacks, fraud, and penalties that can increase your costs and damage your reputation. You can improve your security and compliance by following the PCI standards, which are a set of rules and best practices for handling cardholder data securely. You can also use encryption, tokenization, and fraud prevention tools to protect your transactions and data from hackers and thieves. Additionally, you can follow the card network rules and regulations, such as providing clear refund policies, displaying your contact information, and verifying your customers' identities and addresses.

4 Reduce your chargeback ratio

A fourth way to reduce credit card processing fees is to reduce your chargeback ratio. A chargeback is when a customer disputes a transaction and requests a refund from their bank. Chargebacks can occur for various reasons, such as unauthorized purchases, defective products, or unsatisfactory service. Chargebacks can cost you not only the amount of the transaction, but also a fee from your processor and a penalty from the card network. Moreover, if you have a high chargeback ratio, you can face higher fees, lower limits, or even termination of your account. You can reduce your chargeback ratio by providing excellent customer service, communicating clearly with your customers, resolving issues promptly, and providing proof of delivery and authorization.

5 Review your statements regularly

A fifth way to reduce credit card processing fees is to review your statements regularly. This can help you identify any errors, discrepancies, or unauthorized charges that may affect your costs. You can also monitor your transaction volume, your average ticket size, and your payment methods to see if they match your expectations and your pricing model. If you notice any changes or issues, you can contact your processor and ask for clarification or correction. You can also use this opportunity to evaluate your processor's performance and satisfaction, and decide if you need to switch to a different provider or plan.

6 Use accounting software

A sixth way to reduce credit card processing fees is to use accounting software that can help you track, manage, and optimize your payments. Accounting software can help you automate your invoicing, billing, and reconciliation processes, and reduce the time and effort involved in handling your transactions. Accounting software can also help you integrate your payments with your other financial data, such as your income, expenses, taxes, and reports, and provide you with insights and analytics to improve your cash flow and profitability. Some accounting software can also offer you lower credit card processing fees or discounts, as they have partnerships or integrations with payment processors.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?