7 items to consider when looking for affordable credit card processing
The term affordable credit card processing is thrown around a lot and can mean different things to different businesses. For the purposes of this article we will discuss the affordability of credit card processing in terms of the rates and fees that are charged for the service.
I have broken out the major rates and fees charged for credit card processing. Please keep in mind that there will always be other miscellaneous fees, so be sure to read your merchant contract carefully to understand all that apply and when.
Discount/Percentage Rate (interchange):
This is the largest total expense for the account and is typically negotiable with your processor. There are typically three discount rates associated to the account (this example is for a retail location). The three discounts rates are referred to as the qualified, mid-qualified and non-qualified rates. The qualified rate is reserved for card present / person present transactions. The mid-qualified rate is reserved for keyed in transactions and certain rewards cards. The non-qualified rate is reserved for corporate and international cards. Some rewards cards will also downgrade to the non-qualified rate. When looking for affordable credit card processing
you want to achieve the following for each discount rate:
- Qualified Rate: Between 1.59% and 1.69%
- Mid-Qualified Rate: Between 2.29% and 2.39%
- Non-Qualified Rate: Between 2.99% and 3.09%
Per-Transaction Rate: In addition to the discount rate you will also be charged a per-transaction rate. The per-transaction rate is charged for each transaction that is run through the account. It is important to note that some processors will set up the account to authorize and capture as separate processes, effectively doubling the transaction costs per month. Make sure your processor is authorizing and capturing as one transaction. When looking for affordable credit card processing as a function of the per-transaction rate you want to be between $0.10 and $0.20 per-transaction.
Monthly Service Fee: This is the amount you are charged per month for customer service, account access, statement preparation etc. For an affordable credit card processing account you need to be between $9.95 and $14.95.
Batch Fee: The batch process is responsible for converting the credit card authorizations (promise to pay) into deposit of funds into your business account. The batch process is typically run on all days where authorizations are processed. For an affordable credit card processing account you want establish a rate between $0.15 and $0.25 per batch process.
Monthly Minimum: The monthly minimum is the amount that is charged if the account is not used or used minimally. An affordable credit card processing account will typically have a monthly minimum of $0.00 to $9.99.
Annual Fee: The annual fee is a fee that your business is charged once a year for maintenance of your merchant account. You are best served to negotiate this rate to $0.00.
Termination Fee: This is the fee you are charged if you would like to end your contract early. This fee varies greatly form one processor to the next. Make sure you understand the contract term and termination fee.
If you are looking to set up an affordable credit card processing account we can certainly help. Please contact us directly for a no obligation quote. (800)917-8026. Mention prom code affordable for additional discounts.