When you own a small business, you often cannot afford to turn customers away. These days, the majority of business transactions use credit or debit cards. Therefore, it’s important for your business to accept credit card transactions. The biggest obstacles that small businesses run into with credit card transactions are credit card processing fees. Most merchant account companies charge as much as 5% of credit card sales, which include processing fees, statement fees, and interchange costs. Unfortunately, credit card processing fees are unavoidable, but we’ve included some tips on how small businesses can keep their credit card processing fees to a minimum.
Require A Minimum Card Sale Amount
When your business handles several small transactions under $5, it might not be worth it financially to accept credit card transactions. When your profit margin is extremely low after credit card transactions, you might benefit from setting a minimum card sale amount. Simply place a sign in a very visible place by the register that explains that you accept card payments, but there must be a minimum of $10 (or whatever amount you choose to accept). If there is an ATM nearby, requiring a minimum card sale amount is a great idea.
Swipe Instead of Manually Entering Credit Card Numbers
Manually entering credit card numbers into your system is a bad idea for many reasons. Human error is always a factor because it is easy to enter the wrong number into your system. Unfortunately, manually entered credit card numbers are more vulnerable to fraudulent activity. Oftentimes, credit card numbers are used by thieves to make fraudulent purchases without even possessing the actual credit card. The magnetic stripes in credit cards also contain built-in security features that protect the user from fraud. Therefore, credit card processors charge more for manually entered transactions. If you ever suspect fraudulent card use, ask to see the purchaser’s driver license or photo id.
Ask The Right Questions When Choosing A Processor
When you are choosing a credit card processor, it is best to ask some key questions about their fees:
- When all fees are included, what is the total rate
- How can you get a lower fee per transaction?
- What kinds of contracts are involved?
- Are there any cancellation fees?
- Are there any application fees?
- Do they charge service fees or application fees?
- Can any of these fees be waived?
Do Not Lease A Credit Card Terminal
Buying a credit card terminal is almost always a better option than leasing a credit card terminal. Although the initial cost might be higher, it will save you money in the long term. Owning a credit card terminals will cost you between $200 and $400, but renting a terminal can cost $40 to $70 per month. When you rent a credit card terminal, you will be paying as much as ten to twenty the times the actual cost of the machine.
Americard Payment Processing offers affordable credit card processing services and equipment for small businesses. Whether you are an ecommerce business or a brick and mortar business, our payment solution company offers a credit card service that works for you. Contact us today to learn more.