5 Steps to Lower Your Credit Card Processing Fees

Credit card processing comes with a batch of benefits to businesses of all sizes. However, the costs and fees involved in completing successful online payments can be a total turn-off, especially for startups. Unfortunately, businesses cannot fully avoid processing fees. This is because credit card networks, card associations, and the participating banks require proportionate financial obligations to complete transactions and maintain payment gateways and processors. On the upside, businesses can lower various fees by carefully reviewing statements from their merchant accounts.

Here are 5 basic steps to help your business cut down on credit card processing fees.

Correctly Set Up Your Processing Account and Terminal

Setting up a processing account and payment terminal is arguably the most crucial tool for enhanced online payments. For most businesses, the terminal serves as a sales and financial management platform upon which an enterprise is run and organized. Therefore, it is critical to not only set up the right processing terminal but also go for a processing account that guarantees success.

To correctly set up a processing account, businesses are required to acquire merchant accounts with their banks of choice. With a merchant account, your enterprise can accept debit and credit card payments faster and efficiently. While getting merchant accounts, the choice of card brands and payment processors must be informed by utmost diligence.

Make Sure You Use an Address Verification Service

One of the best ways to curb credit card fraud, especially chargebacks and chargeback fees, is by integrating an address verification service into your payment processing. An address verification service, denoted as AVS, enables merchants to authenticate the customer’s billing address against their issuing banks.

An AVS works by demanding customers to provide their billing address when checking out a payment. The card processor verifies the address by comparing it to the address of the issuing bank. Usually, the verification is designed to identify whether the address is a match, a mismatch, unavailable, or a partial match.

Address verification services benefit businesses in two ways;

  • Card processors provide incentives to businesses that procure an AVS. The incentives are offered in the form of lowered processing costs.
  • AVS limits credit card frauds, lowering the costs related to potential frauds.

Showcase that You Protect Your Device against Frauds

Processing devices or terminals are the backbones of card payment processing. These include the software and hardware on which credit card processing systems run. Notably, to lower credit processing fees, businesses must prove that these devices are well protected against fraud.

While leasing these devices provides a great option to any business, the overall costs incurred in the long term can be hefty. As a result, it is more beneficial to buy and own processing devices, and this is for good reasons.

Firstly, leased terminals attract extra device fees charged by the servicing processor. Again, you will pay more if you have to switch processors. Secondly, buying these devices allows you to have full control of your payment terminals. You can replace, service, or purchase new systems in case of wear and tear. Interestingly, you pay less to maintain these devices when they are yours.

Learn to Settle Transactions Quickly

Merchant accounts tend to consolidate multiple transactions over a period of time before submitting them to the bank for processing. The funds accumulated from all the online payments over this period are then transferred to the acquiring bank by the issuing bank. Generally, the procedures involved, from the initiation of transactions by the merchant’s customers to the transfer of funds by the issuing bank, are collectively known as transaction settlements.

The faster transactions get settled, the lower the payment processing fees. Ideally, business owners instruct payment terminals to complete such transactions manually. However, this takes time and increases the processing rates. To fast-track the settlement process, enterprises should automate transaction batching and settling.

Avoid Non-Processing Fees

Credit card services charge rates as a proportion of each card transaction in what is known as credit card processing fees. Such charges include interchange fees, processing markup, and assessment fees. Processing fees are directly linked to each transaction completed.

However, these are not the only charges associated with credit card processing. There are other costs, such as recurring fees and one-off charges that merchants incur for using a payment processing service. Such costs include rental fees, monthly minimum fees, batch, and statement fees. Evaluating non-processing fees will help you cut down on unnecessary bills and avoid non-essential charges. The good thing with non-processing fees is that most types are negotiable. This is a great way to save a few bucks on your next billing.


Fees and charges can become a burden for any business striving to expand its payment channels. Fortunately, reducing credit card processing fees is achievable with some efforts on the part of the merchant. Before you process your next bill, you might want to review your recent monthly statement to find the fees that can be avoided, lowered, or totally scrapped. Have your online payments terminal properly set up, adopt an AVS service, and learn to settle your transactions faster for lower charges.