Wingman Weekly: Why are Credit Card Processing Fees so High?
Why are Credit Card Processing Fees so High? For many businesses across the United States, processing fees are a considerable monthly expense. Worse, processing fees are a monthly expense that seem to increase over time. Businesses see the percentage of their monthly revenue coming out of their account, but don’t understand why it’s so high, if it’s a normal amount to pay, and what they can do about it.
Merchant service providers can increase processing fees in many ways. The way merchant service providers do this is through hidden fees, and they come in many forms. Additional fees the merchant service provider didn’t disclose such as authorization fees. Fee increases that are disclosed in the fine print of merchant statements. Non-Compliance fees because business owners didn’t know they had to fill out the proper PCI Compliance forms. Regardless how providers apply them, they inflate the cost for the business owner beyond what they thought they were going to pay, leaving a sour taste in the business owners mouth.
How do you counteract these hidden fees? The best way is to read your merchant statements. If you catch this fine print when providers increase rates, you can contact them and sometimes keep the rate from increasing. In addition, you are able to calculate your effective processing rate yourself by taking the total amount you paid in fees and dividing it by the total revenue you made for the month. If that percentage is above 3.5%, you are likely paying above industry average. If you are paying above industry average, it might be time to shop your rate with other providers.
At Wingman Payments, you don’t need to worry about hidden fees. We pride ourselves on transparent pricing and local support. Additionally, you can call us directly anytime and we will help resolve any questions or concerns with your merchant statements.
If you’d like to learn more about how we can help reduce your processing fees, Contact Us at 470-822-8683.