With face-to-face sales down and more sales occurring through eCommerce transactions, transaction fees may seem like a burden. Businesses that have internet merchant accounts often want to prioritize lowering transaction fees while they increase the services they offer. These businesses may look for ways to accept credit cards for free using the payment systems offered by their internet merchant accounts. However, eliminating transaction fees is not as easy as it seems.
Use this short guide to better understand transaction fees and how to lower them for businesses, no matter how small.
What are transaction fees?
When businesses accept credit and debit cards through their internet merchant accounts, they generally have to pay a transaction fee each time they do so. This fee can vary based upon the type of transaction, the perceived chargeback risk of the business’s industry, and other factors.
Businesses that are in high-risk industries such as gambling and pharmaceuticals have a higher chance of having their transactions resulting in a chargeback. This can sometimes raise the fees associated with making transactions through a payment processor, which has to assume more risk to take on that client, since they are responsible for paying out any successful chargeback even if they are unable to obtain those funds from the merchant.
These transaction fees cannot be eliminated completely. Businesses that want to accept credit cards for free need to accept the inevitability of transaction fees, because it costs payment processors to conduct transactions on behalf of the merchant.
How to Make Transactions more Affordable
Businesses cannot accept credit cards for free, but they can take steps to lower the fees associated with eCommerce transactions. Since internet merchant accounts are essential in the modern marketplace, finding affordable methods of processing payments using those accounts is crucial.
The main thing that any merchant can do to keep its transactions to a minimum is to manage the perceived risk level of their business. Because this is usually determined by the industry, anything the business can do to divest their offerings of items that are associated with high-risk industries can accomplish this. For example, a company selling DVDs online may be able to go from being classified as high-risk to being classified as low-risk by eliminating “adults only” titles from their offerings. Other factors can improve a businesses risk classification include improving the credit rating of the person applying on behalf of the company, and making sure that this person is a US citizen or legal resident.
Finally, it almost goes without saying that shopping around to find the best deal for your business as the surest way to ensure that your fees are as low as possible. Make sure the merchant account provider you choose offers low price assurance, so that you know that their prices are the lowest.
Transaction fees can be costly for businesses, especially those that are experiencing higher client volume during the lockdown. Knowing that businesses cannot accept credit cards online for free and that reducing the perceived risk level of the company can lower these fees may help.
Visit Charge.com or call (888) 924-2743 to view products and services that help businesses accept credit cards online, with fees that are as low as possible.