If you’ve ever attempted to read a processing statement, you probably noticed the overwhelming amount of extra fees stacked onto your monthly bill. You probably didn’t know that some, if not most, of those excessive fees are optional. It’s not just important to select a processor that won’t rip you off of every little penny you make, but it helps to know what fees to look for and how to discuss your monthly statement with your customer service team. Everyone loves saving money on their business expenses, and we’re here to tell you that your processing fees are no exception. Here are 5 ways you can cut back on those extra fees and start saving more.
Batch Fees
Batch fees imply that your processor charges a small fee every time you send out your daily transaction history to a bank. Some business owners who are unaware of this extra fee will batch multiple times a day, racking up those fees without realizing it. You can minimize this cost by running batches once a day or switching to a processor that offers free, unlimited batching.
Equipment Leases
If you’re currently leasing equipment, you’re probably being way overcharged. Many processing companies advertise how easy and seamless leasing equipment can be, but don’t be fooled. In the long run, it is definitely more cost effective to simply buy the equipment than to pay 3 or 4 times more through a lease. Another downside is if you decide to switch processors in the middle of a lease, you’ll have to start the process all over gain and possible be charged another hefty fine for breaking the lease with your previous company. We recommend owning your equipment and protecting it with insurance, in the unlikely case that you need to replace a damaged or malfunctioning terminal.
PCI Compliance
Staying within the scope of PCI compliance is important for every business. If you’re unsure of what this means or where to begin, check out our recent article here. In summary, if your business handles cardholder data to any extent, PCI compliance measures ensure that data is secure. Handling any data outside of the PCI Data Security Standard creates trouble for your business and you will be fined excessively. Most processing companies will help you go through all of the requirements to remain compliant on all levels, but there are some merchant providers who charge an extra fee for this service. Check in with your current provider to see where they stand on this subject, and make sure you’re not paying any unnecessary additional fees!
Credit Card Rate Types
This may seem like a no-brainer, but the fees you will see on your statement are also determined by the pricing model your processor uses to charge for their services. Tiered rates and flat rates are common in the industry but are not beneficial for you as the business owner. Within those pricing models, the merchant service provider makes a lot of money off of a large margin they’ve created to cover the cost of all credit card types, which simplifies your billing statement but costs you in the long run. The most cost-effective pricing model is interchange plus because it ensures the interchange fees are passed through at cost and any markup your processor chooses is completely transparent. To read more about these different pricing models, check out our blog article Credit Card Rate Types Explained.
Cancellation or Early Termination
Another fee to mention is incurred when you end your contract early or cancel your account with your merchant services provider. A lot of companies force contractual agreements with their customers, making it difficult to take your business elsewhere. At Rev19, we take a different approach with our merchants and choose not to impose any cancellation or early termination fees.
The industry is pretty well known for keeping business owners in the dark about all of the ins-and-outs of their processing statements, but we want you to know exactly what’s going on. You shouldn’t have to pay excessive fees, and we’ve done our best to cut back those extra costs to put more money back in your pocket. If you want to take this topic a step further and talk through the extra fees you’ve noticed, fill out the quick form below and we’ll connect you with one of our account representatives!