Credit card processing fees can quickly add up and eat into your profits, which can be an unnecessary expense for small businesses.
Credit card companies like Visa, American Express, and Mastercard apply processing rates that range from 1.5% to 3.5%.
At the same time, it’s also hard to find the best credit card processor that offers low fees. And while there are a few options available in the market today, not knowing what to look for can take up a business owner’s valuable time.
This article will walk you through the benefits of low-fee credit card processing and how to find a suitable processor for your business. Discover the low-cost options for small businesses that want to save on credit card processing fees through low rates and no hidden fees.
What Is Low-Fee Credit Card Processing and How Does It Work?
Low-fee credit card processing allows businesses to accept and settle in-store, online, and mobile payments with credit cards while paying much lower fees than traditional merchant accounts. This type of processing helps businesses save money on payment processing costs, allowing them to keep more revenue from their sales.
Credit card processing fees can vary depending on the type of credit card used, the merchant category code (MCC), and the transaction type. These fees can add up for small businesses and eat into profits. Low-fee processing can reduce these costs by offering lower rates for specific credit card transactions.
Low-fee credit card processing typically works by using an intermediary that aggregates transactions from multiple merchants, reducing the fees for each transaction.
Benefits of Low-Cost Credit Card Processing
When accepting credit card payments, low-cost credit card processing offers many benefits—making it an attractive choice for small and medium-sized businesses.
Avoid monthly fees: With low-fee credit card processing, businesses can avoid expensive monthly fees that can quickly add up and eat into their profits. Low-fee credit card processing saves companies money from hidden fees and additional charges.
Freedom to adjust pricing for your product/service: Low-cost credit card processing gives businesses the flexibility to change their pricing structure and tailor it to the cost of their product or services—enabling them to maximize profits and reinvest more into their business.
Security against invalid charges: Low-fee credit card processing provides an added layer of security, as you will only be charged for legitimate purchases made with valid cards. This shields your business from invalid and fraudulent charges. Some credit card processors offer fraud protection, chargeback management and prevention, and dispute resolution tools.
Invest more into the business: Low-fee credit card processing helps businesses save money on payment processing fees. This enables them to reinvest more of their profits back into their business.
Types of Businesses That Work Well With Low-Fee Processing
Certain types of businesses are more inclined to use low-fee payment processing solutions.
High-risk merchants are particularly well-suited to take advantage of low-fee payments. They include those with high chargeback fees or greater exposure to fraud, such as:
- Adult entertainment
- Nutraceuticals and supplements
- Travel and tourism
- Subscription-based services
- Vape and e-cigarettes
- Debt consolidation
Because high-risk businesses carry more risk than low-risk merchants, many traditional payment providers shy away from them or charge higher fees.
Low-fee payment providers recognize the need for high-risk merchants to access reliable payment services and offer lower transaction fees.
Small businesses benefit significantly from the cost savings associated with low-fee payment processing.
For small business owners operating on tight budgets, reducing their merchant account fees can significantly improve their profit margins while still providing customers with a convenient way to pay via credit cards, debit cards, and other digital wallets.
What to Look For in a Low-Fee Credit Card Processor
When looking for a low-fee credit card processor, there are several important factors to consider to ensure you get the best service and value for your money.
Some processors offer competitive rates, while others have hidden costs or additional fees such as:
- Interchange fees (sometimes referred to as interchange rates) are charged by a credit card issuer (bank or other financial institution) to process and complete a transaction.
- A payment processor charges service fees for providing credit card processing services.
- Many processors charge set-up fees for setting up a merchant account and providing related services.
- Credit card networks charge assessment fees, typically a percentage of each transaction.
- PCI compliance fees cover the costs associated with ensuring your business meets PCI standards
- Termination fees are charged by some processors when a merchant account is closed.
Choose low-fee payment processors with transparent pricing and options for flat-fee structure instead of tiered pricing models or interchange-plus pricing.
Additionally, review any contract cancellation fees before signing to avoid any surprises down the line.
Understand what equipment is necessary to process payments. Assess how user-friendly the point of sale or POS system is for customers.
Research different payment terminals and their capability levels, i.e., whether you’ll need additional software (e.g., virtual terminal) or hardware (e.g., credit card reader) to get up and running quickly.
Evaluate how easy they are to use for either card-present or card-not-present (contactless) transactions. Can they quickly and securely process in-person transactions and online payments? Do they have smooth integrations with payment gateways like Square, Stripe, and PayPal?
Setting Up Surcharging
Find out if you can set up surcharging with your chosen provider to pass on credit card fees directly to cardholders. This can be especially helpful for businesses that experience high transaction volumes.
Whether It Fits Your Business Type
Understand whether the credit card processing company provides the necessary services for your business type. Are you in a high-risk industry? If so, you’ll need a processor with a track record of working with high-risk businesses.
For example, industries such as cannabis may require special licensing from state governments for payment processing to occur legally.
Businesses should double-check this before signing a long-term contract with a credit card processor.
Get Zero-Fee Processing with Von Payments
Von Payments provides a zero-fee credit card processing solution for small businesses and startups, helping them reduce business costs.
With Von Payments, your business can accept all types of payment methods without paying additional fees—all while enjoying the same secure and reliable service as larger companies.
Enjoy reliable high-risk merchant services, fast and easy approvals, no requirement for credit history, and knowledgeable customer support. You can sleep soundly at night, knowing that each customer transaction is handled securely and efficiently.
Contact us to make your e-commerce business more profitable today by switching to low-fee credit card processing with Von Payments!