Understanding Credit Card Processing Fees (and How to Keep Them Low)
Introduction
Have you ever looked at your monthly statement and wondered, “Where did all these fees come from?” Credit card processing fees can add up quickly, but knowing what each fee means can help you take control and maybe even save some cash.
The 3 Types of Fees
- Interchange Fees: These go to the bank that issued the card and are often the largest chunk of the cost.
- Assessment Fees: These are paid to the card networks, like Visa or Mastercard, for using their infrastructure.
- Processor Fees: These go to the payment processor for handling the transaction.
Quick Tips for Lower Fees
- Negotiate with Providers: Don’t be afraid to ask for a better deal, especially as your sales grow.
- Pick the Right Pricing Model: If you do a lot of small transactions, flat-rate pricing might be better than interchange-plus.
Fees are part of doing business, but they don’t have to be overwhelming. By understanding the basics, you can better evaluate and manage these costs over time.
