by Brian Chester February 03, 2017

Last Updated: October 22, 2020

Does the thought of spending hard earned revenue on credit card processing fees stress you out?

Many small business owners find credit card processing fees to be extremely overwhelming.

According to the 2016 Bureau of Labor Statistics, about 50% of small businesses fail within the first four years of operation.

By 2018, credit card payment volume is expected to increase by over 50%, while cash payment volume is expected to decrease by 24%.

Without the ability to accept credit cards, the future of your business could be in serious jeopardy.

So how can you accept credit cards while also turning a profit?

Here are 6 ways to get the cheapest credit card processing for small business.

1. Use a Merchant Services Provider Instead of a Bank

A merchant services provider will provide your business with a merchant account so you can securely process credit cards.

Banks don’t always provide their own merchant services. Instead, banks will typically contract out to a third party to process transactions for them, and can even charge you additional fees to hand your business to someone else.

With a merchant services provider, your business can process payments online without having to redirect customers to a third-party website. Additionally, you’ll gain fraud protection to guarantee safe credit card transactions and secure merchant services.

According to the U.S. Small Business Administrations, 82% of businesses that fail do so because of cash flow problems.

Merchant services will help your business increase cash flow and manage finances more efficiently by encouraging a prompt collection of Accounts Receivable. An efficient merchant service should be able to automatically mark your invoices as paid and update your Accounts Receivable.

In addition, make sure that your merchant services provider can obtain the lowest charges on business-type and government purchasing credit cards. This will lower your overall costs and ensure the cheapest credit card processing for small business.

2. Choose a PCI Compliant Payment Gateway

Essentially, a payment gateway is a cloud based credit card processing software. It facilitates credit card transactions, linking transaction information between the credit card network and the card issuing bank to authorize the payment.  Once approved, the payment gateway passes funds from your customer’s credit card into your merchant account.

Since this process deals with sensitive credit card information, it is crucial to ensure that data is being handled within a PCI compliant payment gateway.

A PCI compliant payment gateway should utilize both tokenization and encryption technologies and meet all PCI specifications set by the Payment Card Industry. This ensures that credit card information is being protected throughout each stage of the transaction process.

A payment gateway that is not PCI compliant can result in severe data breaches and cause thousands of dollars in credit card fraud.

Processing with a PCI compliant payment gateway minimizes security risks and protect your business from hefty fines. In fact, the fine for not being PCI compliant can cost your business as much as $100,000 per month in fees.

3. Integrate Your Payments

Rather than processing transactions outside of your accounting software and manually marking your invoices as paid, you should consider a provider that offers a way to process transactions within your ERP/accounting software. This eliminates double data entry and potential for human error.

Integrating your payments can automate the process and provide you with more time to focus on current customers and bringing in new clients.

In fact, Small Business Digest reported that 91% of small to medium business owners with integrated payment systems reduced back-office expenses by at least 21%.

4. Get Personalized Service

As a business owner, your time is valuable. Find a provider that can do it all.

If their idea of customer service is an outsourced phone number or email address, then stop and say no thank you.

In fact, 67% of customers are unable to resolve customer service issues when they cannot talk to a live person, according to the American Express Survey. What’s more, the average American spends nearly 43 days on hold in a lifetime.

Can you afford to lose more than a month of revenue waiting on hold?

Personalized service can help guarantee the cheapest credit card processing for small business.

Avoid the middle-man and get straight to the source with an in-house customer support team. You’ll have the privilege of speaking to a live representative who will be able to process your inquiries and quickly resolve any issues with your services. You should also know your relationship manager, and be able to contact them directly with any questions regarding your account.

Also, choose a provider that offers an all-in-one solution. They should develop their own integration and payment gateway, as well as provide payment processing for your business. This avoids third-party complications and allows for prompt, in-house customer support.

5. Select a Flat Rate Pricing Option; Avoid Tiered Pricing

Before you decide to do business with a merchant services provider, make sure they offer flat rate pricing.

Flat rate pricing guarantees the same low monthly rate for any type of credit card, and makes it easy to see exactly how much you’ll be paying in processing fees each month.

Steer clear of any provider that offers a tiered pricing option. Tiered pricing is a red flag.

With tiered pricing, processors typically offer a “qualified rate” which is very low, but can hide their margin behind a much higher “non-qualified” rate.

With flat rate pricing, you can process credit cards at the same low rate each month without having to pay any additional transaction fees.

6. Watch Out for Hidden Fees and Mandatory Contracts

Many merchant service providers will attach a mass of additional fees to your credit card processing services.  If you’re not careful, these can quickly add up and create a debt of unnecessary charges, including: application fees, long term contracts, installation/upgrade/support fees, monthly minimums, and many others.

A credit card processor should be transparent with nothing to hide. Some important features to look for include: $0 setup fees, $0 upgrade fees, $0 maintenance fees, FREE in-house customer support, flat rate processing options, and an experienced chargeback management team.

Your merchant services provider should be confident in their ability to provide you with exceptional, affordable service without having to lock you into a contract.

Secure the Lowest Credit Card Processing Fees for Your Business

Credit card processing doesn’t have to be overwhelming.

Remember to choose a secure merchant services provider that offers a PCI compliant payment gateway, along with integrated payment services to optimize your processing solutions. Also, ensure that your processor offers flat rate pricing and in-house customer support.

With these simple steps, you’ll be on your way to getting the cheapest credit card processing for small business.

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