How To Lower Credit Card Merchant Fees (Visa, MasterCard, Discover) 

Credit card merchant fees are daunting, confusing, and obnoxious to say the least. Identifying which credit card processing fees are mandatory vs a mark up cost can be difficult, and finding the correct ways to lower your credit card merchant fees without having to switch processors is a task every business should look into. 

Other than a technical circumstance with equipment, software, or your business’ gateway, you should always look to lower your credit card merchant fees before making change to your credit card merchant provider. When you switch credit card merchant service companies, you have to look at the costs to making a change. There are equipment fees, gateways fees, the costs to teach your employees on how to work the new systems, and the risk involved that comes with making a change.

Most credit card merchant providers can use deceptive sales tactics to make it seem you are getting a good deal by switching. But if you are a novice to credit card processing, review these tips below to help you navigate the credit card merchant industry. 

Tips to lower credit card merchant fees:

Step One: Have a short listed of Credit Card Merchant Providers – (If you already have a credit card merchant provider, disregard this step) 

• All credit card merchant providers, for the most part, are interchangeable. Nowadays, they all need to adapt and be able to cater to the needs of the ever changing landscape of payments. If they cannot, they are falling behind. Once you determine the technical needs of your business, i.e. equipment, gateways, API, ERP, management software, etc, then it’s time to choose a provider.
• Regardless if you go with an ISO (Independent Sales Office) or a Direct Processor, it really does not matter. Most people become weary of “third party processors or resellers” thinking that there are extra costs incurred. Realistically, it does not matter. Sometimes there is more pricing flexibility with third party ISO’s and even better customer service. The key is to ask who will be handling your customer support, whether it’s in house or outsourced (in house is better) and whether your are on the correct pricing structure comparable to the other quotes you have received. 

Step Two: Ensure a credit card processing rate increase has not occurred

• If you know how to already read a credit card processing statement, you are a step ahead of the curve. Audit your last 3 credit card processing statements and compare the discount, per trans, auth, and monthly fees you were charged. If you know how to identify surcharges, do the same exercise to ensure the credit card processing rates are consistent.  
• If you do not know how to read your credit card processing rates, get a free audit or analysis to have someone point them out to you. Knowing your baseline costs and what you currently pay is crucial to knowing how much wiggle room you have in negotiations.

Step Three: Evaluate if you are under contract and for what length of time is remaining

• Being under contract has no affect on a rate reduction. The term remaining on the contract however, will affect to what extent you are able to reduce your existing credit card merchant fees. If you have less than 6 months remaining, you will reduce costs significantly. If you have 24 months or more remaining, you can still achieve savings, they just may not be as prominent as you may have liked.

Step Four: Do your homework – leverage the competition

• The credit card merchant industry is deceptive, cutthroat, and beyond competitive. Solicitors will hound you daily vying for your business, and although you are “too busy”, you should actually listen because it could be the key to reducing credit card merchant fees. 
• Do not go into a negotiation blind without any ammunition of how the rates and fees work. You need an understanding of your current pricing structure, the other pricing structures in the industry, the service markup you are charged, and the industry standard of what your competitors pay.
• Do no ask for a reduction, tell them you want a reduction and give examples of pricing that you want to obtain. Do NOT let the credit card processing company dictate the negotiation.
• Demand Interchange Plus Pricing – more on this Here.

Step Five: Push Back

• Credit card processing companies will tell you that they cannot go any further in lowering their credit card processing rates after the initial negotiation. This is not the case, but simply a tactic used to get you off the phone. Of course they do not want to lower your credit card merchant fees because it ultimately loses them money. However, it may 2 or 3 times to further reduce your costs. 

Step Six: Monitor your credit card merchant fees monthly

• Monitor your credit card merchant statements monthly. Most processors spike their rates quarterly, some even do it as often as a monthly rate increase. You need to be aware of this because lower your credit card processing fees is only half the battle. You need to ensure that your pricing always stays low, and never increases once you negotiate. It requires a monthly audit in order to make sure that credit card merchant fees aren’t being increased. If a business is looking at a merchant processing statement with an untrained eye, rate increases are going to be impossible to detect. Merchant Cost Consulting is the only way to find each and every hidden fee on your merchant statement each month.