Your organization shouldn’t be paying too much in credit card processing fees. It simply doesn’t make business sense.
While Audit Advantage is negotiating the markup fee your current credit card processing company charges, there are some organizational changes and decisions you can make and deploy to help reduce excessive credit card processing fees, too.
To help you get started, here’s our list of 3 ways to reduce your credit card processing fees.
#1. Use an Address Verification Service (AVS) to Fight Would Be Thieves from Defrauding You
Everytime your business runs a credit card, you’re charged a processing fee. But what if that credit card was stolen or cloned. While the cost of the service or merchandise that was fraudulently charges will be refunded to the victim once he or she disputes the charges with his or her credit card company, you’re still on the hook for paying the credit card processing fee.
An Address Verification Service can help to significantly reduce fraudulent credit card transactions from identity thieves with stolen or cloned credit cards. Gas stations figured this out long ago, which is why every time you pay at the pump, you’re prompted to enter your zip code so the AVS can verify that the person using the card knows where the person whose card it is lives, thus greatly reducing the cost of credit card fraud.
An AVS works by quickly verifying the address on file with the address your customer inputs into your point of purchase station, to make sure that the two pieces of data match. If they don’t, the card gets declined, and you save yourself from fraudulent purchases and their associated credit card processing fees.
It’s unfortunate that fraud is such a huge problem for today’s businesses and organizations, but the good news is that with an AVS, it’s easier than ever to fight off identity thieves before they can defraud you.
#2. Save on Interchange Fees by Settling Your Batches as Quickly as Possible
The big banks like to settle their credit card transactions quickly. That’s why they motivate you by providing you with a lower interchange fee if you settle your batches ASAP – usually within 24 hours.
But with this carrot, also comes a stick. If you delay or postpone the amount of time you take to settle your batches, interchange fees will rise. And remember, these fees are non-negotiable.
Your best bet at avoiding these rising interchange fees is to have an internal process in place so you can quickly settle batches and take advantage of the lowest interchange fees that the banks whose cards you accept will offer.
#3. Set a Minimum Purchase Price Before You Allow Customers to Pay with Plastic
While it’s true that data proves most people spend more when they’re paying with credit – which helps your business make more profit – sometimes customers will try to use their credit cards for very small purchases.
If you let customers charge any amount they want on a credit card, you may end up with too many purchases that are so small that after you’ve paid the credit card processing fee and factored in the cost of the good or service, you’re not netting any profit at all!
For this reason, we recommend you set a minimum purchase price that can be charged to a credit card. This way, your customer can get what he or she wants and needs, and you can cover your overhead and make a profit, too.
Reach Out to Us for More Advice
At Audit Advantage, we know the credit card processing industry inside and out. If you have any questions about how to deploy these strategies, or would like to learn more, we’re happy to help. Simply fill out our contact form or call us at (877) 799-2720.