Cheapest Credit Card Processing: Is Your Business Paying Too Much?

Cheapest Credit Card Processing: Is Your Business Paying Too Much?

It’s no small feat these days finding the cheapest credit card processing solution. It seems like every credit card processing company has a way of clouding what you’re getting.

The last thing that any business owner needs is to pay too much for processing, especially when processing for small business.

The cheapest credit card processing companies that are out there are great, but only if you know what to look for.

Retail businesses that hide transaction fees, clauses and other unmentionable stuff in their contracts are contemptible, like a termination fee.

You the small business owner deserve better, and you can get it.

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Learn more about how Zero Fee Processing has actually put money back in the pockets of a real-life business owner.

Cheapest Credit Card Processing: Checking the Facts

Just how do you know if you’ve found the cheapest credit card merchant account?

It turns out that there is a list of things that you can check to make sure you’ve found reputable credit card processors to get your credit card payment processed.

Certain industries may find it harder to find a credit card processor because they might be considered a high-risk industry.

Certain industries can vary whether the businesses inside of them are considered a high-risk business or not.

Industries like car insurance and life insurance can depend on multiple things, like the history of the driver and the health of the individual.

An insurance company varies heavily on who is receiving the insurance. So, it can be a high-risk account for a processing company to obtain.

Many top credit card processing options and payment options turn down high-risk types of businesses due to fear of losing money on that account.

Just a little bit of knowledge and a good dose of grit and determination can help you find the cheapest.

While you’re there talking with them, you might as well find out if they will be anything more than a cheap price. Am I right?

Cheapest Credit Card Fact Check #1: Fees

If the cheap processing company that you’ve found is messing around with rates and fees, keep looking.

Evaluating per transaction fees is a good way to make sure you’re getting the lowest merchant account fees.

First of all, what is their fee structure? Let’s break down what credit card processing option is here for a second.

When a customer decides to pay with a credit card at your business, where does the money go? It turns out that there are 3 fees paid with every credit card transaction.

The First Fee –

This fee goes to the issuing card company. You (the business) pay them (the card issuer) a percentage fee for running their card.

This fee can range in price from 0.05% up to 3% and higher per transaction. This is the first and most expensive fee involved.

The Second Fee –

This is what’s commonly referred to as a “swipe fee.” This is the fee that you pay the issuing card company for swiping their card at your terminal.

This is a fee that’s usually measured in cents rather than a percentage.

This “swipe fee” occurs with every credit and debit card transaction. A common cost for this fee is between $0.22-$0.25 per swipe. This fee also goes to the issuing bank.

The Third Fee –

This is the markup fee charged by the processing company to pay for their services. The first and second fees go to the card originator, thus why Visa and Mastercard are wealthy companies.

This third fee is what goes to the merchant processing company that you signed up with.

The fee that’s charged by your merchant solutions provider is the only revenue that they make. This fee is what you’re fighting to keep low to save your business money.

It makes sense that over time this third fee has gotten out of control. Since this is the fee that makes the profit for the credit card processing company, they want it high.

They want as much money as they can get away with charging in this area that you’ll pay. (and still be their customer.)

There are many ways to keep this third fee low, but many merchant services providers get tricky. This is where misdirection, confusion and hidden fees all come into play.

We’ve written extensively about types of credit card processing that are honest and transparent.

If you want to learn more, you might want to check out this post for additional information.

Zero Fee Processing – Let your customers pay the card processing fee

Cost + (or Interchange +) Pricing Model (interchangeplus pricing) – Get the most transparent pricing model available. Understand what you pay and to whom you pay it every month.

Getting the customer to pay the interchange fee or the interchange rate will result in a dramatic decrease in the amount of fees that you pay per purchase. 

Cheapest Credit Card Fact Check #2: Processing Method

Paying a low rate isn’t what gets you the cheapest credit card processing in the end. Having a low, flat rate is one of the major factors, but it isn’t the only factor.

One way to ensure that your fees are staying low is to comply with PCI regulations. If these regulations are followed, you will not have to pay a PCI compliance fee.

The method that you use to process credit, debit cards and gift cards makes a huge difference in how much you pay to accept credit card payments. For example, if you’re keying in cards instead of swiping them, you’re paying a higher rate.

Here’s a perfect rule to follow. If the card is actually present for a transaction, always swipe the card. This keeps your business credit card processing fees lower and makes sure that you aren’t paying extra for no reason.

Use of EMV terminals is another perfect example of keeping your processing costs down. If you have customers who are paying with cards equipped with EMV chips, use them. Don’t just allow your customers to continue to swipe their cards, use the chips.

Why all the fuss about making sure you use the EMV chips when processing transactions? Is the EMV chip is present and you’re not inserting it at the point of sale? If so, your business can be on the hook for the entire transaction amount if it is contested.

Contested transactions are commonly called “Charge-backs” in the industry. It happens when a customer decides to contest the validity of the transaction and refuses to pay. When this occurs, it used to be that the card company would cover the cost, but EMV changes this.

With EMV chip cards, if your business isn’t accepting them and inserting the chip, you’re on the hook. Your business becomes responsible for paying the issuing card company for the transaction.

This is an absolute no-brainer in getting the cheapest credit card processing rates. Don’t keep your business on the hook. Protect your business by upgrading to an EMV terminal and save yourself potential added costs.

Cheapest Credit Card Fact Check #3: Equipment

The equipment that you’re using to process credit card payments at your company could be adding to your monthly fees, and eventually your annual fees. Are you using an integrated point of sale terminal at checkout? If you are, you may be paying quite a bit extra per card payment.

Many point of sale terminals come with separate module fees that greatly increase costs. If you’re using a point of sale system and want to add inventory management, extra cost. Maybe you’re using the “free” marketing system that comes with the machine, but don’t forget the monthly activation flat fee.

These little costs add up, and when combined with your other fees above create a complete fee picture. Cheap credit card processing is about looking beyond rates. Module fees, lease fees, and extra monthly minimums and costs can balloon what was before a great rate.

Mobile and Online Options: 

Many POS terminals contain POS software that allows a business to accept online payment through a payment gateway, while also containing credit card readers to accept in-store payments as well.  Your card reader should contain a chip reader to enforce more secure purchases.

If your online business is in need of online credit card processing, many POS systems can handle that. When you set the system up with your online store, it will be able to process online transactions. 

Many national processing companies are now using mobile credit card processing as well, allowing the processor to connect to a mobile device and turn that mobile device into a POS system through a mobile app. These mobile credit card readers can handle payments from all major credit cards, while also accepting mobile payments like Apple Pay.

Mobile card processing is a pretty simple way to accept payment if you have a compatible mobile device. However, the mobile card readers themselves are fairly expensive, along with the many fees that come with them. Mobile processing can be a good idea, but the expenses usually outweigh the convenience. 


If you’re looking for the cheapest credit card payment solutions for your business, dig deep.

When choosing POS systems, make sure you’re asking the right questions to unveil all the fees hidden within. 

There are great processing companies out there, you just need to know when you’re talking with the right one.

Compare credit card companies and processors, determine your top picks and decide which method to accept payments is best for you.

Go into your next conversation with a payment processing company or payment processor armed with the truth. Know what you shouldn’t have to pay to keep your monthly payments low.

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