Introduction
As a business owner, you know how important it is to have reliable payment processing solutions in place to maintain and expand your customer base and increase your profits. This is especially true if your company operates online, and it means that there are various variables to think about before settling on a payment gateway. If you don’t take the time to investigate the specifics and compare your options, you could end up spending more than necessary in fees or encountering other issues that cut into your business’s bottom line.
- Shop around: It’s important to compare different payment processors and their fees to find the one that best meets your needs and budget. Don’t be afraid to negotiate lower fees with your payment processor, as many are willing to work with their clients to find a mutually beneficial arrangement.
- Choose the right pricing model: Payment processors typically offer several pricing models, including tiered, interchange-plus, and flat rate. Each model has its own pros and cons, so it’s important to choose the one that best meets your business needs.
- Avoid unnecessary fees: Some payment processors charge additional fees for things like chargebacks, account setup, or early termination. Carefully review your contract and try to negotiate these fees out if possible.
- Use a payment gateway: Using a payment gateway can help reduce your overall processing fees by allowing you to bypass some of the fees charged by payment processors.
- Process higher-value transactions: Payment processors often charge lower fees for higher-value transactions, so consider encouraging your customers to make larger purchases to reduce your overall processing fees.
- Use a specialised payment processor: Some payment processors specialize in certain industries and offer lower fees to their clients. If your business falls into a specialised category, consider working with a payment processor that caters to your industry.
- Accept multiple payment methods: Offering a variety of payment options, including newer alternatives like cryptocurrency, can help you attract more customers and potentially reduce your overall processing fees.
- Review your processing volume: Payment processors often offer lower fees for higher processing volumes, so it’s important to regularly review your volume and consider switching to a processor that offers lower fees as your volume increases.
Find a company that deals with processing large quantities.
A bulk processor may offer lower fees for merchants with high transaction volumes. Bulk processors have greater customer service and fraud prevention. This can help if your firm is prone to fraud or has experienced chargeback troubles.
Bulk processors provide better reporting features than individual ones. This is useful if you’re testing different techniques and want to track their success.
Check your rates quarterly
Check rates quarterly. Your provider may negotiate rates if you have a solid relationship with them. If not, examine other suppliers who provide better rates or other payment processing solutions. We have summarised a list of payment providers sorted based on their pricing to make it easy for you to choose from.
Use a well-known gateway
● Ensure the gateway you choose is a reliable and well-known one.
● You should stay away from any doors that look suspicious.
● Stay away from non-PCI-compliant gateways.
● Don’t use gateways that have a poor reputation among your target audience.
Protect your business with third-party fraud detection.
It is important to work with providers that have anti-fraud systems in place as this would eliminate the risk of having malicious transactions, especially when you are processing online. These services can lower payment processing rates by preventing chargebacks, which occur when a client challenges a credit card charge.
Accept International Payments
Global commerce requires international payments. You may miss opportunities to build your business and reach overseas clients if you don’t accept international payments. Online shopping has climbed 16% since 2013, according to the Minneapolis Fed. As more individuals shop online, this trend should continue. You can accept foreign payments through a payment gateway that allows it,
Never accept exorbitant processing fees.
● Be innovative to lower your processing fees.
● It’s important to keep an open mind while evaluating new payment methods.
● High processing fees aren’t permanent. Shop around for the best rates and fees, study the fine print on your contract, and use social services like Facebook Messenger or WhatsApp as much as possible (if accessible).
We can give you access to review several processors and understand their pricing before finalising your payment partner. Never be hasty when choosing your payment provider as this impacts the business greatly
Learn what your PSP charges.
After you know what your PSP charges, make sure the rates are fair. Contact your Payment Service Provider if a cost seems wrong or unreasonable.
Unless the fee seems unjust, don’t worry about it. If this happens regularly with a particular transaction or service provider, switch to prevent excessive fees.
Understand your monthly volume.
How much business you perform per month affects your payment processing fees. Calculate the monthly volume:
● multiple daily sales by 30. That’s a month’s worth of sales for most businesses (excluding car dealerships, who do over $100 million).
● Subtract refunds or returns from this total; if you have none, add 100%. This is your average transaction ticket size (cost per item). If you sold a $5 item every day for a month with no refunds or returns, your average ticket would be $150 ($5 x 30 days).
Know your fees.
First, know what you’re paying and why.
Check with your merchant services provider or credit card issued to see how much you’re paying. Credit card companies may charge you a servicing fee and an interchange fee. These two costs account for most processing fees.
Choose a gateway with many payment methods.
A firm needs a payment gateway for accepting online payments. Gateways process credit card information and send it to the bank. It’s crucial to choose a gateway that works with your website and provides the capabilities you require. You should choose a gateway with a wide range of payment methods so you can accept all major cards, including credit and debit cards. You need to be able to give your customers the ability to pay through their preferred method as this not only boosts the volume, but also builds trust over time.
Conclusion
The processing of payments is an essential part of operating any kind of business, although it can be a challenging procedure with a great deal of procedural variability. You will make the best decisions for your business if you know how the different costs are calculated and how you can work with the payment service provider you used to lower those costs. I hope you’ve found some helpful information in this piece about how to reduce your transaction costs. Get in touch with us if you have questions. When you work with us, you can expect to have plenty of options to choose from.
