How to trim extra fees from your payment processing

Last Updated on October 11, 2023

As a business owner, you worry about inflation, a possible looming recession, labor shortages, and supply shortages- we get it. As a small business serving other small businesses, it hits close to home. Not to mention it's just smart business.

As a consumer, you might already be cutting out coupons, taking the bus to save on gas or parking, and looking at which subscription services are going unused.

You might be skeptical when you hear this, but one of the places business owners can reduce costs is their payment processing. Most people see the expense of accepting payments as a commodity, akin to their insurance or utility bill, and will go with the first provider their bank offers by default.

We’re here to tell you that not all processors are the same- and where you can find significant savings when it comes to a necessary utility of accepting credit and debit card payments at your business.

Here are a few actions you can take to ensure your saving your business money while accepting payments:

1. Read the fine print before jumping into a contract

Sometimes you can spot impending fees or hidden costs before signing your contract. A few terms to be wary of include equipment rentals, early termination fees, and penalties. Make sure you read reviews and the fine print before signing up for a merchant account or switching providers. If you’re looking for a way out of your contract, understanding the terms and conditions is a good start to finding a way out penalty free.

2. Keep an eye on your statement

If you're looking for ways to cut your processing costs, combing through your merchant statement can be a goldmine of hidden fees and overcharges. Your spidey senses might be telling you your bill seems high- and chances are this isn't the first time, or the last, that your processor might have pulled a fast one on you.

Even the good guys make mistakes, so checking in every now and then on your monthly totals doesn't hurt either. Ensure you know what to look for when reviewing your statement and get familiar with industry terminology that could be cloaking hidden charges.

3. Look into interchange pricing

If you're like us and you like to be in control of your pricing, and you don't mind digging in a little further to calculate your processing rates. Rather than a flat rate, you can get the wholesale rate with an interchange plus pricing model with a smaller markup. Staying up to date with interchange rates can help you take advantage of lower or special rates that other processors don't have access to.

One example: Merchants can take advantage of lower rates for tokenized transactions by using a recurring billing tool (all merchants have access to this tool with their free Helcim account) and voilà: A merchant may be eligible for a cheaper processing rate.

4. Reconsider your options

Many businesses don’t spend a lot of time considering who they will choose to accept payments through. It can be complicated and time consuming to compare options - household names or the idea of “simple” pricing becomes very compelling.

However you got to where you are now, it never hurts to take the time to reevaluate your options.

You might already know you're being fleeced just by that sinking pit in your stomach when you see your monthly statement. Or maybe you’re tired of struggling to gain clarification on your those odd extra charges.

Aside from looking for an interchange plus pricing model, there are some core characteristics any decent payment processor should have.

Take quality customer service and transparent pricing for example.

Transparent pricing means:

✓no monthly fee which is at least $15 on average

✓ no device rentals (why pay $30 a month for a year when a card reader could be $140 flat upfront)

✓ no “annual maintenance fee” (you save up to $900 a year!)

✓ no PCI compliant fees

✓ no extra fees like admin or "batch settlement fees”

✓ no security fee (that should just be standard, no?) Clover charges $16/ a month for this.

If you’re looking for more tips on how to choose a payment processor for your business, read our article on how to choose the best payment provider here.

5. Get the scoop on flat rate processors

Know where to spot signs of fishy behavior- and where you can save! Processors like flat rate merchant service providers are counting on keeping you in the dark by making their model seem friendly and upfront. Businesses like knowing how much they can expect to pay every month and are willing to pay a premium for it- but if you’re reading this article and are looking to cut costs- switching pricing models might be the easiest tip yet.

Not only are you paying a premium, but processors who offer subscription or flat rate pricing won't pass on the interchange cost savings when rates become lower meaning their costs go down but yours stay the same.

If you're willing to pass up on the savings, know that even though these might seem simpler to understand, even flat rate processors may still be charging you hidden and extra fees. If you're unsure which pricing model your current payment processor uses or you're curious about the options, we have a comparison article here.

A wild notion- Affordable payment processing

Sometimes even reading over last month's statement can seem like a task in itself but if you’re willing to put in a bit of elbow grease you can find impactful ways to save. This article has some helpful tips if you’re looking for a good place to start.

Accepting payments is a utility most businesses need to pay, but that doesn’t mean there aren’t ways to find savings and cut your costs. Unlike most things these days, at Helcim, we make payments affordable.