Credit Card processing is a major source of revenue for small merchants. But, after learning of merchant services where unstructured account fees diminish profits, some merchants choose to accept only cash and check payments. If this describes your position, consider that what you have heard about merchant services may apply to the minority, and that credit processing could indeed increase your revenue. If you need information on credit card processing for small businesses, the answers below can help.

What are the benefits of small business credit card processing?

Small business credit card processing helps small businesses by structuring fee rates to keep account fees at an acceptable level in relation to a merchant’s account revenue. Often, small businesses find credit processing unprofitable due to rate structures that result in poor profit to account fee ratios. If you are avoiding card processing services for this reason, AVPS can help.

What account fees are charged for credit processing?

Most merchant services charge the following fees for credit processing:

• setup fee
• discount rate
• transaction fee
• monthly gateway fee
• monthly statement fee
• chargeback fee
• early termination fee
• monthly minimum fee

Other legitimate fees can include:

• annual fee
• address verification fee
• programming fee
• voice authorization fee
• surcharge fee

With the right rate structuring in place, these fees comprise a small percentage of each transaction.

How is the cost of account fees determined?

Account fees are largely determined by the cost of the services that they result from. For example, many merchant services offer gateways through a gateway provider, and a discount rate is a collection of charges that is paid to an acquiring bank for its services. Because all merchant services pay roughly the same amount for these services, their account fees are usually very similar.

What is the best strategy for avoiding bogus fees?

The best strategy for avoiding bogus fees is to read the account contract very carefully before you sign it. The most common bogus fees are ones that kick in after a certain period of time, and ones that make advertised rates extremely conditional. Bogus fees have various names. Some common ones are: file fee, security fee, conversion fee, and over-limit fee.

What is the process for evaluating a merchant service?

Many merchants consult merchant service reviews before selecting a service, which is a good idea. But you should also check a service’s record at the Better Business Bureau (BBB), verify that the acquiring bank listed on its website is legitimate, inspect the fees it charges, and consider whether it has the range of account options you need.

AVPS Has Answers You Need

If you are avoiding card processing for fear of account fees, AVPS understands your position. For over 25 years, we have provided Small Business Merchant Accounts that offer the rate structuring small businesses need to succeed. In addition to providing accounts that make credit acceptance profitable, we can also provide the right card processing terminal. To learn more about our account options for small businesses, call us today.