How Can You Avoid Credit Card Processing Fees?
While accepting credit card payments is essential for running your business efficiently, processing those payments comes at a cost. There’s very little that health, medical, and wellness businesses can do to eliminate credit card processing fees outright. But there are steps you can take to reduce or avoid credit card processing fees.
Credit Card Processing for the Small Medical Business
There’s a great deal going on behind the scenes every time your health or medical business processes a credit card payment. Most transactions happen in seconds. But it takes a team of credit card specialists to ensure those transactions are seamless, including:
- Your customer’s credit card issuing bank
- The credit card company (Visa or MasterCard, for example)
- Your company’s bank (also known as the acquiring bank)
- Your merchant account provider
- Your payment gateway provider (if you offer online credit card processing)
With so many parties involved, it’s easy to see why certain credit card processing fees are unavoidable. You can keep those fees to a minimum, however, by choosing a merchant account provider with transparent pricing.
Choosing your payment processor wisely means knowing exactly what to expect in terms of fees before you sign up. The more questions you ask, the less likely you are to be blindsided by hidden or unexpected charges.
Breaking Down Credit Card Processing Fees
The processing fees for most card-present (swipe or chip reader) transactions range from 1.5% to 3.0%. Because of the higher fraud risk involved, however, you should expect to pay about 3.5% for most card-not-present (online or keyed-in) transactions.
These percentages represent a combination of interchange fees– the fees charged by issuing banks and credit card companies – and merchant account processing fees. While interchange fees remain the same no matter which payment processor you work with, processing fees vary widely.
To reduce your credit card expenses as much as possible, you should compare the transaction, flat, and incidental fees merchant account providers typically charge. Here’s how these processing charges break down:
In general, the lower your average sales amount, the higher your transaction fees are likely to be. Most payment providers charge per transaction. So you’ll pay more to process four $25 credit card sales than you will to process a single $100 transaction.
Many merchant account providers charge monthly or annual subscription fees. These fees usually cover the costs attached to providing customer support and maintaining payment industry card (PCI) compliance.
Other credit card processing charges you should watch for and compare include:
- Set-up and cancellation fees
- Payment gateway provider fees
- Rental charges for credit card processing equipment
- Fees for issuing statements
Some incidental fees aren’t essential for every type of business, and can often be negotiated with the service provider.
Credit Card Chargeback Fees
If you’re a small business accepting credit cards, one of the most effective ways to prevent unnecessary fees is with a strategy to avoid credit card chargebacks.
A savvy payment partner will be able to instruct your business on best practices for processing credit card payments, and assist you with chargeback procedures. The right service provider may even be able to reduce credit card chargeback fees by helping your business identify fraudulent charges.
The Best Payment System for Small Business
Every company’s payment processing demands are unique. But if there’s one thing small health, medical, and wellness businesses have in common, it’s the need for a customized system that’s built around their budget.
Healthcare payment processing companies like Beacon specialize in tailored, EMV-compatible credit card processing solutions that offer next-day funding and full integration with QuickBooks.
And that’s important. Because the more efficient and secure your payment processing system:
- The faster your patient payments will clear,
- The safer your transactions will be, and
- The easier it will become to manage your financial records
All of which adds up to more profitable cash flow, less time and money spent keeping your books, and fewer credit card processing fees overall.