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Understanding Your Credit Card Processing Fees

Businesses need to have a knowledgeable, honest and transparent representative to handle their credit card processing in order to get fair rates and help you understand how much you are actually paying.

There are many different types of pricing. A few of the more common rates are:

  1. Tiered

  2. Flat Rate

  3. Flat Rate Plus

  4. Interchange Plus

What you have to be careful of are the one's I call Junk Fees for things you don’t need.

It's important to understand what you are signing up for and check to to see if how often you are subject to a rate increase.

When I had my retail business, Jan's Patio Furniture, for 20 years, I thought my rates were standard and we all paid the same percentage and fees. Then one day a knowledgeable representative visited my store and showed me how much I was over-paying.

He switched me over to Interchange Plus pricing, which is the most transparent pricing model, and the savings was huge.

I was overpaying thousands of dollars each month!

Interchange Plus pricing is also the pricing model the big companies such as Walmart, Costco and other big box companies use.

Interchange Plus pricing is transparent because it passes on the Interchange price of each card taken and a processing fee is added according to the size of your business. There are not many places to hide Junk Fees or raise your prices without you seeing the price increase. Visa and MasterCard have posted pricing online for each card and some small things change twice a year, but not much.

There are companies processing companies that take advantage of the small changes in a dishonest way and raise your prices twice a year when Visa and MasterCard repost their prices. I encourage you to be aware of when the increases happen and how much rates are increased so you don't get taken advantage of.

Many companies like to start a business of on a low teaser rate, only too slowly increase and make up for the original low rate. If it’s too good to be true, it probably is!

Many credit card processing companies like the Tiered Pricing model because it’s easy to raise the merchant’s pricing without it being noticed. It’s no wonder they make the statements hard to understand and read!

Credit Card Processing Fees do not have to be an uncomfortable cost of doing business. You can take control of what you pay and offer programs such as Cash Discounting.

Know your options and talk to a credit card broker that can offer you multiple solutions because they do not work for just one company, they work for you.

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