Credit Card Processing Fees

The Credit Card Processing Fee Scam

credit card processing feesHave you seen the ads for a 0.15% swiped rate for example? Do not believe the hype and you can avoid getting locked into a contract that will end up charging you an arm and a leg in high fees. Come closer and listen carefully. That 0.15% rate you are being promised is not for credit card processing fees. It’s a pin-based debit card fee. However, some companies are presenting these rates as if they really are for credit card sales. Do not get fooled.

Over the past 15 years I’ve seen all kinds of switch and bait scams to lure new customers in. Yet, one thing that has remained true is the cost of accepting credit cards. No matter what any one tells you today, rates for Visa and Mastercard will hover around 1.69% for most face-to-face sales. In othe words $0.0169 per dollar.

Why? Because, some transactions can cost less. However, the key variable depends on the card customers use and how they pay. Some cards carry rewards points which are actually passed through to the merchant business owner. Some cards are corporate commercial cards which carry higher fees to process. In reality, there are over 100 different credit card processing fees that can occur.

If a customer pays by phone, the internet or the credit card machine uses a telephone line, that may add more costs to the transaction. This is why working with a very good experienced Merchant Account Agent can save you money. After years in the industry, I’ve learned the tricks they don’t teach the average sales agent. 

For example, if your business qualifies, I can give you a real rate as low as 1.59% plus $0.20 per authorization fee today and show you how to save on processing fees overall. Most merchant service employees don’t know all the rates. 

Some businesses do get better lower credit card processing fees. Yet, they too must rely on the type of card presented and they must have the right equipment and communication connection. Contact me and I can recommend the right equipment that will let you get lower processing fees.

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 Want To Learn More About Credit Card Processing Fees?

Look, I know that every business owner wants to save money on processing fees or even pay nothing at all. However, the fact is, accepting credit cards costs money and if your customer isn’t paying for credit then you must. The power of accepting credit cards is it gives you the benefit of allowing people the ability to afford your products or services. Listen, we are a nation based on credit. Many people could not afford the quality of life they enjoy without credit. That’s why using credit cards makes such a huge impact on a business.

Companies that don’t accept credit cards lose out on potential revenue. Think of it this way, a credit card holder can be profiled as someone who:

#1 Has a bank account

#2 Very likely has a stable job or income and a certain disposable income

#3 Very likely makes payments on time to their credit card company

#4 Very likely has a credit line of money they will spend somewhere

#5 Will make purchases based on what they can afford based on payments. Otherwise, they may not make a purchase.

What Accepting Credit Card Do For You?

The most important benefit the above description should help you realize is, understanding who your customer is and their value.

As a majority of customers who come into your door, which of them would you rather have? 

A. Customers who can only pay in cash: People who very likely don’t have a bank account.  Are unable to make large purchases without financing.  Individuals, who if applied for a credit line with your company would be turned down.

B. Or would you rather have a fair portion of your customers be individuals who fit your criteria of ideal customers? For those of you who would consider arguing this point because you cater to children, keep in mind that it’s the parents who pay the bill.

Why I Explain The Importance Of Accepting Credit Cards

Fact: You should consider that the fee you pay, like anything else you pay for, pays for a level of service.

You’re not just paying a fee because Visa & Mastercard say so. Your paying a fee because you receive a level of service comparable to the amount that is charged. A credit card processing company charges a fee in return for financial lending services.

Who you pick as your merchant account agent is important too. A merchant service provider’s representative should be able to confidently explain to you how you benefit from accepting credit cards. Plus, they should be able to show you how accepting credit cards results in attracting a certain clients to your business.

A merchant services representative should have enough knowledge to help you get educated on the relationship between credit card holders, debit card holders and how it effects your business. If your consultant can’t at least do this for you, you may be dealing with the wrong company. As the saying goes, “You get what you paid for.”

Don’t be swayed into believing the cheapest credit card fee is the best.

Fact: All merchant service providers get the same wholesale rates from the same sources (Visa, Mastercard, etc.). All credit card processors are basically the same when it comes to price.

One big difference is, how it is packaged for you.

For example: Today our standard rate is 1.69% + .25 cents per transaction. If you find a company that is offering a much higher rate question why.

If a rate is extremely lower than this, it may very likely mean there is another fee elsewhere. For example, an rate like 0.39%. Companies who have creatively named fees tend to offer extremely low fees as a marketing trick to sucker you in. Yet overall, you’ll find that cheap prices end up being higher than normal prices overall.

If a rate is higher than today’s standard rate your paying too much. Unless the transaction fee (.25 cents) is lowered, the offesetting benefit doesn’t help your business. 

How Credit Card Processing Fees Are Packaged

Credit card processing fees are normally presented in two parts. The first being the discount rate or processing fee and the second being the transaction rate. Why they are presented this way would take a huge explanation. For now, understand that this is the way it’s required to be presented.

The 0.25 cents for example, is also called an authorization fee or batch fee. Anytime your credit card machine or terminal connects to the merchant service company that is considered a transaction, even if connecting is just to perform an inquiry.


How to put more credit card processing fees back in your pocket 

Is your average ticket sale $20 or more? If so, you may be an ideal business to save money. 

Yes, I said to save money on credit card processing fees.  

This is how much it may cost you to accept a Visa or Mastercard and credit card processing fees. 

Now take your average ticket amount $______ and list this as a value of one. (One being the number of transactions cheap credit card processing fees) 

This is how much (.50 cents) it would cost, as compared to your ___? credit card processing fees. 

Which would you prefer? Would you rather pay a flat .50 cents per transaction or would you instead prefer to pay the % fee + .25 cents? Which is less or lower credit card processing fees? 

This is the benefit of credit card processing fees for accepting debit cards as opposed to a credit card. Remember, your average ticket amount will help you decide if your better off converting those debit cards with Visa & Mastercard logos into debit sales.


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