How to Get the Best Merchant Credit Card Rates

Getting the best merchant credit card rates involves understanding the fee structures of merchant services companies, or companies that process credit card transactions for businesses. Their fee structures usually include a monthly fee or monthly minimum, as well as a percentage fee on the amount of each transaction you process and a transaction fee that accrues each time you process a sale. There is no single fee structure that is best for every merchant; rather, you need to understand your business' particular needs and processing patterns, and choose the fee structure that is best for you.

Instructions

1. Contact a variety of merchant services companies, including your own bank, and ask about their credit card processing rates. Ask about their monthly fees, their fees per transaction and the percentage fee they charge on the amount of each sale. Monthly fees usually run about $25 per month, fees per transaction are usually between 20 cents and 50 cents, and the percentage fee on each sale is usually between 1.5 percent and 4 percent of the sale amount. If your business accepts phone or Internet orders, also ask about their rates for transactions that you enter by hand rather than sales where you physically swipe a customer's credit card. Rates for keyed transaction tend to be higher than rates for swiped transaction because there is a higher error and return rate on this kind of sale.

2. Evaluate your business' sales patterns. If you make a limited number of substantial transactions you will probably benefit from a fee structure that includes a low percentage rate on the amount of each sale, even if that package charges a relatively high fee per transaction. If your business makes a large number of small sales, the percentage rate on the dollar value of your sales may be less important than the fee for each individual transaction. Consider the percentage of your sales that involve physically swiping a customer's credit card, and the percentage of phone and Internet orders that involve entering customer credit card information by hand.

3. Choose the merchant services company whose fee structure provides the best rates for your business' particular sales patterns.

References

• Merchant Council.org: Merchant Account Basics
• Advanced Merchant Services: Merchant Accounts Basics and Information
• The University of Arizona Bursar's Office: Merchant Services Definitions