CREDIT CARD PAYMENT PROCESSING: HOW TO REDUCE FEES
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CREDIT CARD PAYMENT PROCESSING: HOW TO REDUCE FEES

It doesn’t matter if you use Intuit QuickBooks or any other accounting or ERP product – chances are that you are relatively limited with credit card merchant processing due to the integration requirements between your system and the merchant’s system. With that said, there are still many options available and in most cases you are not getting the best rates possible.

Intuit provides their own merchant services starting at 2.9% plus 25 cents for invoiced transactions or 3.4% plus 25 cents for keyed-in transactions (both for QuickBooks Online). These increase for QuickBooks Desktop which are between 2.4% to 3.5% plus 30 cents per transaction.

The key to reducing credit card fees is really three parts: 1. Talk to your merchant processor about ways to reduce your fees; 2. Find an alternative processor so you can negotiate between the two and increase competition; and 3. Do your own homework and commit to re-evaluating merchant providers frequently.

Talk to Your Merchant Provider
Sometimes all it takes is a conversation to find out that you could qualify for better credit card processing rates if you were able to provide more data or if you make small changes in your business. For example, asking your provider to look into the possibility of qualifying your transactions for level three processing rates (requires more data) may cost you a bit upfront but it could also reduce your rates significantly. This isn’t the best scenario for your merchant provider since it’s more work and can mean that they make less money but if you ask, they may work with you on this. Further, underwriters qualify you for rates based on the inherent risk of your customers. You could have a small subset of customers that are causing your merchant fees to increase. You may be able to simply change your business so you avoid these types of customers or perhaps change those over to a pay-up-front or manage them with cash-only to allow you to qualify for lower rates for the remainder of your customer base. You must talk to your provider. Most good companies will work with you if you take them time.

Find an Alternative (or Two or Three)
If your current merchant provider has no competition for your business then what reason do they have to give you the best possible rates. Find an alternative provider and get a quote. The alternative provider will ask for credit card statements so they can see what you’re currently paying. Of course they will try to beat those rates. You can then turn around and do the same with other providers including your current one. Competition is good for you and allows you to see multiple proposals. Be cautious of companies that want to lock you into multi-year contracts as well since this will limit your ability to shop the market as rates change.

Do Your Homework
You need to understand the basics of payment processing to save the most money possible on fees. And for the record, credit card fees can be extremely expensive. We’ve seen companies save over $80,000 by simply changing processors! That’s the savings – not the amount they were actually charged! You can save a ton if your customers are willing to pay via ACH instead of credit card. Even if a small portion of customers would make this switch you can still save a lot of money. You also need to understand which apps on the market offer integration to different processors. For example, Anytime Collect is an accounts receivable automation application that integrates with QuickBooks and offers integration to several merchant processors who consistently provide among the lowest rates available. New apps and providers are surfacing every day so continue to be on the lookout for new ways to save money.

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