Enjoying Lower Credit Card Processing Rates for Your Business

28 Aug

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Credit card processing is one of the best improvements that you can make to your business. Using a credit card reader allows you to quickly access information from customers’ credit cards in order to make payment for the products and services that you offer. Carrying cash is a risk that most people do not want to take. There is a risk of unmonitored spending and risk of theft or even loosing the money.

One concern among many merchants is the question of whether the credit card processing rates will eat into their business profit margins. This should not be something to worry about as credit card readers help you save money on each transaction.

The card reader itself is a very affordable piece of equipment. Costing anything from between $30 to $70, it is between the budget ranges of any business. The card readers are also able to save money with every transaction and you will recover the purchase cost in no time.

Credit card reader processing is provided for by merchant services. The charging rates usually slightly vary from one services provider to another. However, there is always a part of the transaction that goes to the service providers.

One of the payments that usually go to the service providers is referred to as the discount rate and divided into three major categories: A qualified transaction discount is deducted for cards that are physically swiped. Mid-qualified transactions refer to manually keyed in card information using address verification service. Non-qualified transactions are manually typed in without the address verification service.

The cheapest of the three is qualified transactions using a card reader. This is because such transactions are less risky. Fraud and security concerns are not a problem and therefore service providers as willing to offer cheaper rates for these kinds of transactions. The rates normally stand between 1.5% -1.9% percent of a qualified transaction.

It is very easy to see why you should use a credit card reader in your business transactions. It is a great way to accept payment whether your business is always a buzz of activity or simply processing a few cards in a day.

21 Responses to “Enjoying Lower Credit Card Processing Rates for Your Business”

  1. Shannon September 9, 2013 at 2:26 am #

    No. 4: Extend child tax credits and marriage-penalty fixes

    Will extend aspects of the Bush tax cuts such as child credit expansions and changes to marriage bonuses and penalties.

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    No. 6: Create an Advanced Manufacturing Fund to invest in peer-reviewed manufacturing processes

    “Will create an Advanced Manufacturing Fund to identify and invest in the most compelling advanced manufacturing strategies. The Fund will have a peer-review selection and award process based on the Michigan 21st Century Jobs Fund, a state-level initiative that has awarded over $125 million to Michigan businesses with the most innovative proposals to create new products and new jobs in the state.”

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    No. 16: Increase minority access to capital

    “Strengthen Small Business Administration programs that provide capital to minority-owned businesses, support outreach programs that help minority business owners apply for loans, and work to encourage the growth and capacity of minority firms.”

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    No. 17: Require economic justification for tax changes

    Adopt the economic substance doctrine, a policy that states that tax changes must have significant economic justification, as a federal law.

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    No. 26: Implement “Women Owned Business” contracting program

    “Will implement the Women Owned Business contracting program that was signed into law by President Bill Clinton, but has yet to be implemented by the Bush Administration.” The program seeks to get more women-owned businesses to compete for federal contracts.

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    No. 27: Change standards for determining broadband access

    Will direct the Federal Communications Commission to “provide an accurate map of broadband availability using a true definition of broadband instead of the current 200 kbs standard and an assessment of obstacles to fuller broadband penetration.”

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    No. 33: Establish a credit card bill of rights

    The credit card bill of rights would “ban unilateral changes … apply interest rate increases only to future debt … prohibit interest on fees … prohibit ‘universal defaults’ (whereby a credit card raises its rates because the consumer was late paying a different creditor … require prompt and fair crediting of cardholder payments.”

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    No. 36: Expand loan programs for small businesses

    Expand “the Small Business Administration’s loan and micro-loan programs which provide start-up and long-term financing that small firms cannot receive through normal channels.”

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    No. 37: Extend the Bush tax cuts for lower incomes

    Extend the Bush tax cuts for those making less than $250,000 (couples) or $200,000 (single)

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    No. 40: Extend and index the 2007 Alternative Minimum Tax patch

    Extend and index the temporary fix to the Alternative Minimum Tax that was passed in 2007

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    “Barack Obama wants to close the ‘doughnut hole’ in the Medicare Part D Prescription Drug Program that limits benefits for seniors with more than $2,250 but less than $5,100 in annual drug costs. Approximately 4 million seniors hit the doughnut hole in 2006, paying full price for drugs while also paying drug plan premiums.”

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    Expand “the Senior Corps program, which connects individuals over the age of 55 to local volunteer opportunities, and work to provide additional security, including assistance with retirement and family-related costs, to seniors who participate in public service.”

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    No. 51: Require insurance companies to cover pre-existing conditions

    Require insurance companies “to cover pre-existing conditions so all Americans, regardless of their health status or history, can get comprehensive benefits at fair and stable premiums.”

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    “Income-based sliding scale tax credits will be provided for people and families who need it.”


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  2. Sam September 9, 2013 at 12:27 pm #

    I have a merchant service business and would love to know what ways could I market toward merchants by helping them with their credit card processing?

  3. Carlo September 17, 2013 at 2:20 pm #

    I would like to put up a store with physical address as well as an online store business. Since I will accept payments from credit cards, I need to have a credit card processing company. What factors should I consider when looking for a credit card processing company?

  4. Retta September 17, 2013 at 2:32 pm #

    I have a small restaurant business that makes around 300k a year. I am thinking about accepting credit cards because many customers want to use credit cards but we only accept cash. How much would the startup costs be for getting a credit card system in place? Also, how much roughly are monthly fees and how much are transaction fees (estimates are fine)? Are there any contracts when signing up for credit card processing? In all honesty, would it be best for me to stay cash only or would it be better (again in your opinion) for me to go with a credit card system.

    One more thing, we are more of a seasonal business in that we get most of our customers (about 75% of our income) during May-August and in November-January. Other months the business is slow.

  5. Matha September 17, 2013 at 4:57 pm #

    I saw a news clip about a new mobile credit card processing service that was going to be head to head with square. I remember the reporter talking about how Chase was partnered with both square and this new company. I also remember the new company had some sort of data package. I can’t for the like of me remember the name of this company. Anyone know which/what I’m talking about?

  6. Andre September 17, 2013 at 7:58 pm #

    In the state of Maryland can an employer make a waiter pay a portion of the credit card processing fee?

    My employer has just informed us 2% of our credit card tips with be automatically deducted to cover credit card processing fees. Is this illegal? I feel like this should be the responsibility of the employer,

  7. Kacy September 17, 2013 at 8:01 pm #

    A friend of mine is having an issue at their store, they have 10+ POS Systems and a server. PC America with CRE (Cash Register Express), and their credit cards stopped processing on all registers. The credit card processor doesn’t give support on the weekends, so I’m asking for any suggestions I can offer him to solve the issue. Could it be hardware? I doubt it since it’s occurring on all systems.

  8. Jamie September 17, 2013 at 8:02 pm #

    I am looking for a credit card processing company who can do processing for our US based clients buying our service online. We are an indian based company so we want this company to wire transfer us the money in our indian account. I spoke with couple of companies and they said, they do it on case to case basis.

    I am currently using paypal and never had any dispute since last 1 year so is that an advantage?

    Thanks in Advance!

  9. Daphine September 17, 2013 at 9:46 pm #

    My credit card processing company unilaterally charged me a higher discount rate than we agreed. My first monthly bill reflected this. Any idea why such a legitimate business company would do this?

  10. Avelina September 17, 2013 at 9:47 pm #

    I own a small business and I’m expanding in a couple of weeks. The current credit card company I’m with charges me some pretty high rates but they’ve been with me since the beginning and took a chance on me. Would it be illegal for me to use another company to process my credit cards for my new location? Can I have more than one credit card processing company?

  11. Lue September 17, 2013 at 10:23 pm #

    I would like to know if cab companies have contracts on their credit card processing..

  12. Jacinda September 17, 2013 at 10:39 pm #

    Have frequently experienced this with travel agencies when I use my credit card. The processing fee of 2% is charged to me, thus would end up using Nets to avoid it. There is also a fear that the business may wind up after you pay upfront. Can any action be taken against them? Who are the watchdogs that I can report this to?

  13. Miquel September 18, 2013 at 12:12 am #

    When I signed up for a credit processing service for my store, I thought I am doing my business a favor. Unfortunately, it was the opposite. I spent a lot for fees and charges. Why do I end up paying more than I bargained for with my credit card processing company?

  14. Timmy September 18, 2013 at 1:00 am #

    I would like to know a good, secure and honorable credit card processing machine company? The cost of machine and all the fees which I shall be charge and how the process work. Any information would help I know their a lot company out there providing this service but I am having hard time to choose.

  15. Sherlyn September 18, 2013 at 1:03 am #

    The owner here is charged for processing credit cards for orders and he wants to pass along this charge (4%) to his customers, is this allowed?

  16. Bryon September 23, 2013 at 4:09 am #

    I am reseaeching the credit card industry and need to obtain a list of all credit card processors within the USA as well as a detail oeverview of the credit card process. Also any federal regulation.

  17. Su September 23, 2013 at 9:08 am #

    I am thinking about getting a job selling credit card processing. It seems like an extremely competitive field, and I suspect there is a lot of turnover, and I am looking for a little info from somebody that has experience in this area.
    Is it a good opportunity?

  18. Miquel September 23, 2013 at 9:10 am #

    So… I get 5% cash back bonus at restaurants this month from my credit card. IDK about you but I do my best not to spend THAT much money going out to eat. So how can I capitalize on my cash back bonus this spring?

    Well, I work at a restaurant and was going to use MY credit card to pay for tabs that the customer paid cash in. Then I pocket the cash and use it to pay my credit card off and get the cash back bonus.

    The food is getting paid for, my credit card gets used, and I get cash back. Everyone wins right?

    The only thing I can think of not being OK is that the restaurant pays for the credit card processing. Other than that would this actually be considered fraud in any way? Do you think they could fire me for this?

  19. Yolanda September 23, 2013 at 9:24 am #

    I have come across a few shady credit card processing companies and am now wary of which one to pick or which combination of equipment to use. Any suggestions? I am a hair stylist working booth rental. I would like to use a laptop…is there anyway to connect a card reader and use software only? Or do I truly need a credit card processing company?

  20. Jackqueline September 23, 2013 at 12:35 pm #

    In a few days’ time, I will be getting credit card processing service. Any tips or ideas before I sign up?

  21. Kareen September 23, 2013 at 11:26 pm #

    When it comes to Credit Card Processing industries, (ex: Flagship, First Data Chase Paymentech, etc.) where does the bank come into play? What role do they have and why do Credit Card Processing industries need them?

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