While many things separate one credit card processor from another, pricing is a huge factor that has an immediate impact on you, the merchant. However, with over 1,200 interchange rates, the age-old question of “What rate do you offer?” requires a much more detailed response. Several factors affect the actual cost of accepting payment with a credit card – industry, customer card type, processing method, settlement time, etc. But that doesn’t mean you are helpless in reducing your costs. There are best practices that can reduce your costs and improve your bottom line. Here are 4 ways to lower your rate when processing credit cards.
- Swipe or Dip – If you have a customer in front of you, it’s always best to swipe or dip the card. You can still manually key your customers’ card, but that adds risk to the transaction, and interchange rates are closely related to the transaction’s risk. When you manually key a card, the card brands (Visa, MasterCard, Discover, American Express) imply a higher risk for the transaction because they can’t be sure the card is present. Long story short: if you can see the whites of their eyes, swipe or dip the card. Do everything you can to avoid manually keying in a transaction.
- Data, Data, Data – When executing a card-not-present transaction, the more customer information you can provide, the lower your rate will be. When accepting payment online or over the phone, providing AVS information (the customers’ address and zip code) will qualify your transaction at the lowest possible rate. You can achieve even more significant savings with Level III interchange, unique to business and purchasing cards. Lowering the rate to this level requires a substantial amount of data to be submitted, usually from a specialized gateway like the one we offer.
- Settlement Times – Setting your terminal up for auto-settlement is a quick update to any piece of equipment and can help improve your situation immediately. Many merchants are unaware that leaving transactions un-settled in a terminal for more than 24 hours makes those transactions cost more! Except for very unusual circumstances, your processor should set your equipment to auto settle at the same time every day.
- Right Tool for the Job – While the credit card terminal is still the standard means to accept card payment, numerous other solutions exist that are industry-specific. There are systems designed for e-commerce, restaurants, business-to-business (B2B), or companies that rely on recurring payments. Just because the terminal you’ve been using for the last 5 years works doesn’t mean it’s the best fit for you right now. We recommend continually working with your credit card processor to learn what options are available to you and ensure you’re using the solution that can offer you the lowest rate qualifications and other helpful functionalities.
Stay Engaged
While these are some general ways you can lower your rate and control your costs, the most important thing is to stay engaged. Just because you’ve always paid certain fees doesn’t mean those are fees you should still be paying.
Mabrey Bank would love to show you how we can drive down your rates, ensure you are using a processing system that is the best fit for your business, and improve your overall credit card processing experience. Learn more here, or reach out to Chris Morgan at (918) 293-1755, or cmorgan2@mabreybank.com.