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5 Top Tips to Reduce Merchant ACCOUNT Fees

There are certain proven methods which help in lowering the expenses by reducing the merchant fees and saving money. Following are a few tips which go a long way in reducing the processing fees for merchant accounts:

Shopping around for merchant accounts – A number of firms make false promises to merchants about reducing the costs. It is only be realised later by the merchant that the rates are far higher than what was promised. It is always a good idea to shop for rates at reputed companies. Also, the white and black of what is being overcharged should be mentioned. By following this, the rates which are more than what was promised can be blacked out legally from the contract and another processor can be opted for. If a dealer is opening a merchant account for the first time, it is advisable to obtain quoted from various merchant account providers. The information obtained from each and every processor should be used for quoting the next merchant account processor. The more knowledge a merchant gains, the lower the charge will become.

Have a look at “Interchange Plus Pricing” – interchange refers to the minimum fee which is paid to MasterCard and Visa. Interchange plus pricing is usually reserved for outsized merchants but it is also offered to smaller traders as well. this will lower the rates drastically but depends on the type of industry and the manner in which the credit cards are accepted. However, it is not applicable to all traders and sometimes the tiered accounts are a better option for smaller traders.

It is best to get better tier pricing from another processor – The merchant account pricing is made up of components as follows:

-       Discount Rate – this is the fraction rate for non-qualified, mid-qualified and qualified tiers. The non-qualified and mid-qualified tiers are known as the downgrades and depend on the type of card as will as the swipe transaction processing. The qualified rate is the lowest.

-       Transaction Fee – a transaction fee is charged if a transaction or authorization is processed, either by internet or phone of swipe or keyed in transaction. Based on the ticket size average, the transaction fee has a huge impact on the business. If the ticket average is small, the transaction fee could be a huge fraction of the fee. The higher the amount for transaction sales, the lesser the transaction fee affects the total fee.

-       Statement Fee – This fee has to be paid on a monthly basis. A few processors take a big sum for this service. As this fee remains fixed every month, it is best to try and reduce this fee.

Try reducing the minimum processing fee – The processing fee is applicable if the sales are not being processed at the end of every month or if there is a small volume of sales each month.

Try avoiding service plans on monthly basis – A few processors try pushing such plans on merchants. These fees on monthly basis are not recommended.

Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.