Another 3.5% lost in payment processing fees.
If your business makes a million dollars this year, that's $35,000.
What if you could get this rate down to 1.5% (or $15,000).
Imagine what you could do with an extra $20,000.
Invest in new inventory, hire additional staff, upgrade your equipment, or simply improve your profit margins.
Every dollar saved on payment processing is a dollar that can help grow your business.
Let me show you how to get the best credit card processing rates and keep more of your hard-earned money where it belongs – in your business.
Types of Credit Card Processing Fees
Interchange Fees
Think of interchange fees as the cost of moving money from your customer's credit card to your bank account.
When your customer pays with a credit card, their card-issuing bank (like Chase or Capital One) takes on risk – they're essentially giving your customer a mini-loan.
The interchange fee compensates these banks for:
Taking on credit risk
Handling fraud costs
Processing the transaction
Maintaining the payment network
These fees go directly to the card-issuing banks (like Chase or Bank of America) and typically make up the largest portion of your processing costs.
Here's what impacts these rates:
Card type (rewards cards cost more to process)
How the card is processed (in-person vs. online)
Your business type (restaurants vs. nonprofits)
Security measures used
Assessment Fees
These are the fees charged by card networks (Visa, Mastercard, etc.).
They're smaller than interchange fees but still add up.
Chargeback Fees
Chargebacks – every merchant's nightmare.
When a customer disputes a charge, you're hit with fees from multiple directions:
Chargeback processing fees ($15-100 per incident)
Possible loss of the original transaction amount
Additional fees if you lose the dispute
Higher processing rates if you get too many chargebacks
What makes chargebacks especially painful is that you'll pay the fee even if you win the dispute.
Plus, too many chargebacks can put you in a "high-risk" category, leading to:
Higher processing rates
Additional fees
Account termination in severe cases
How to Reduce Chargebacks
The best way to handle chargeback fees isn't to fight them – it's to prevent them.
To reduce your chargeback exposure, implement:
Clear billing descriptors
Excellent customer service
Solid fraud prevention tools
Payment Gateway Fees
Think of payment gateways as the digital version of your physical card terminal.
While your physical card terminal handles in-person payments, your payment gateway securely processes online transactions.
They're essential for online transactions, but they come with their own cost structure.
Processor Markup Fees
We discussed interchange fees and assessment fees.
But here's where things get interesting – and negotiable.
The sum of fees that your processors charges you outside of interchange and assessment fees is the markup fee.
This is how your payment processor makes money, and it comes in several flavors:
Monthly fees
Per-transaction fees
Statement fees
Gateway fees
Equipment fees
The Payment Processing Fee Formula
Your total processing fee typically looks like this:
Total Processing Fee = [Interchange Fee + Assessment Fee + Processor Markup]
For example, on a $100 transaction, you might pay:
$1.80 (interchange)
$0.15 (assessment)
$0.55 (processor markup) = $2.50 total fee
Hidden Fees to Watch For
Here's where processors often pad their profits:
Early termination fees
Monthly minimum fees
How to Negotiate Lower Processing Markups
Here's the secret processors don't want you to know: processing markup fees are negotiable.
Let's dive into how to get better rates.
Know Your Numbers First
Before you start negotiating, arm yourself with:
Your monthly processing volume
Your average ticket size
Your current effective rate (total fees ÷ total volume)
Your current statement (to identify all markups)
Leverage Your Volume
The more you process, the more power you have.
Specific Items to Negotiate
Target these fees:
Monthly statement fees
Annual PCI compliance fees ($79-$120 / year)
Monthly minimum fees ($10-$25 / month)
Terminal fees ($25-$45 / month)
Early termination fees ($300-$800)
Negotiation Strategies That Work
Get Multiple Quotes
Collect 3-4 competitive offers
Ask processors to beat your current rates
Get everything in writing
Watch for teaser rates
Time It Right
End of month/quarter when sales teams are hungry
When your current contract is nearly up
After a significant increase in your volume
Use This Script:
"I'm processing [volume] monthly.
I've received offers from [competitor names] at [rate].
Can you beat these rates?
I'd prefer to work with you, but I need more competitive pricing."
Red Flags When Negotiating
"These are our standard rates"
"We can't negotiate these rates"
"Sign now for this special rate"
Conclusion: Take the Next Step
Every percentage point you save goes straight to your bottom line.
Whether you're processing $10,000 or $1 million per month, take action today to review your current rates, gather competitive quotes, and start negotiations with processors.
Don't leave money on the table!
Visit jrpayments.com to schedule your free 30-minute consultation.
We'll review your current processing statements, identify hidden fees you shouldn't be paying, and create a custom plan to reduce your rates.
Our merchants typically save 25-40% on their processing costs – imagine what your business could do with those savings.
Book your consultation today and take the first step toward keeping more of your hard-earned money where it belongs: in your business.
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