Can You Negotiate Your Credit Card Processing Fees?

We live in a world where everything is negotiable. Whether it be the price of an item at your local grocery store or the cost of your monthly mortgage, there are always opportunities for negotiation.So why should you have to pay exorbitant credit card processing fees? Read below to find out more about this topic.

Why Do Credit Card Processing Fees Exist?

To understand why you might want to negotiate your credit card processing fees, it's helpful to know what these fees are and how they work.When a consumer uses their credit or debit card to purchase a merchant, the business is charged an interchange fee toward paying for all of this payment infrastructure (including fraud prevention).This fee is typically around three percent of the total transaction amount. In turn, this interchange fee results in a higher consumer purchase price.

Why Would Anyone Want To Negotiate Their Credit Card Processing Fees?

Because these fees are so high and they ultimately get passed down from businesses to consumers through increased prices for goods and services, it makes sense that consumers would want to do everything they can to lower them.While it is nearly impossible for specific individuals or businesses to negotiate the interchange fees directly, other options often succeed when trying to reduce credit card processing costs.

How Is It Possible That Credit Card Processing Companies Are Willing To Give Discounts?

Credit card processors might seem like an unhelpful corporation. Still, many of them will offer some concessions if the customer has enough volume or a large number of transactions per month.This system works out for both parties involved because their relationship continues, and more money flows through these businesses.Additionally, while there may not always be room for negotiation with Visa/MasterCard's rates, interchange plus pricing allows more flexibility to reach fair terms between two business parties.This type of agreement only exists due to competition, so try finding another processor who offers better prices.

How To Negotiate Your Credit Card Processing Fees?

If you've done your research and feel like it's time to negotiate, there are a few options that can be taken. Before anything else, though, let the credit card processing company know that you're serious about finding better terms.This means sending them an email (and following up with one if they don't answer) or calling their office directly.Next, ask them what they can do for your business. This might not be easy to answer, so you should have some average pricing from other vendors to estimate how much it will cost.

Lastly, if the rates are reasonable and there's room for negotiation on both sides, this is where the real work begins. Be prepared to send over information about your business and prove that you're a reliable customer, once they see this, there's room for the company to lower its fees to satisfy both parties.While it may seem intimidating at first, negotiating with credit card processors is possible.

What Are the Benefits of Negotiating Your Credit Card Processing Fees?

There are numerous benefits to negotiating your credit card processing fees. Here are the most important ones:

• You can save a significant amount of money each month: reducing your processing fees can save you thousands of dollars every year. You're showing the credit card company that you're serious about doing business with them. By being proactive and willing to negotiate, they'll be more likely to give you better rates in future transactions. They also recognize how much volume is essential for their business so that this relationship can be mutually beneficial.
• Negotiating can help you advance in a competitive industry: it might take time, but the savings that come from doing so will be well worth it. You can save a significant amount of money each month by negotiating your credit card processing fees. Being proactive shows companies how serious you are about business. This relationship can be mutually beneficial because they recognize how much volume is important for their business.
• Negotiating saves your company time for other purposes: time is the most important asset to maintain in any business. It can help them save money and build better relationships with other businesses, which are invaluable aspects that every entrepreneur should strive for.
• Negotiating builds customer trust: people often think of credit card processing as a huge corporation that doesn't care about small businesses. However, when you show them that it's possible to be taken seriously and reduce your rates at the same time, they'll see how their assumptions were wrong.

Common Questions About Negotiating Your Credit Card Processing Fees

Below are common questions about negotiating credit card processing fees for a business.

How much does it cost to negotiate your credit card processing fees?

There is no cost to negotiate your credit card processing fees, but how much you are currently paying will affect the amount saved.

What is the average percentage that banks charge for processing a transaction?

The average percentage that banks charge for processing a transaction is between three and five percent.

Is it worth negotiating my credit card processing fees?

It may be worth your time to negotiate your credit card processing fees if you pay more than this amount.

Do you have any tips/tricks for negotiating my credit card processing fees? 

It is essential to know how much your credit card processing fees are before you begin negotiating. You will also want to understand the current market rate for these services, as this can help you deal more effectively.

Is it better to negotiate my credit card processing fees or switch banks? 

It may be better to negotiate your credit card processing fees before switching banks. However, if you are paying more than the market rate for these services (three-five percent), it may be time to switch providers.

Is there a limit on how much I can save by negotiating my credit card processing fees? 

There is no limit on how much you can save by negotiating your credit card processing fees, but the amount saved will depend on your current payment rate.

Does getting approved for more credit cards help me with negotiating rates? 

Getting approved for more credit cards may help you negotiate rates with your current bank. Still, it will not necessarily change the rate regardless.

What are the best practices when negotiating rates with processors? 

The best practice for negotiating rates with processors is to provide a compelling case and show how you can bring in more revenue. You should also have proper documentation showing your current payment rate so that the new bank knows what they are working with.

What if banks don't want my business, but I need lower credit card processing fees? 

If banks do not want your business, it may be time to find a new bank that can offer you lower credit card processing fees. Be prepared with proper documentation showing the current rate you are paying and the market rates to negotiate more effectively.

What should I expect from negotiations on my credit card processing fees? 

It is important to know what you should expect from negotiations on your credit card processing fees. Most banks will lower rates, especially if they want your business or are currently losing money with their current rate. However, it may be possible that the bank offers little time for making changes and does not offer any special incentives as other providers do.

Conclusion:

Get on the phone with potential providers once you've crunched the numbers and determined what your company requires to stay afloat. Negotiating credit card processing fees can save you a lot of money. Many companies will lower their rates if they know another company is interested in taking over. If you're sick of paying expensive credit card processing fees, it's time to take action. Write a letter and negotiate your rates. If the company refuses, shop around for better rates elsewhere. Don't just accept what you've been told. There are always other options available if you look hard enough!