One of the worst parts of owning a business is having to pay your credit card processing fees each month. These high fees can be painful, but also confusing if you’re not sure where all of your money is going.

So why are credit card fees so expensive? There are many different types of fees, but here are some of the most common that are probably costing you the most money.

Interchange Fees

These are the credit card processing fees you as the business owner will have to pay to the bank that issued your customer their card. They go toward covering not only customer’s bill but also any fraudulent charges.

These fees vary depending on what type of card the customer is using. The riskier the transaction, the higher the interchange rate. For example, if the customer is using their PIN to make a payment, the interchange fee is lower, because the transaction is more secure. On the other hand, rewards cards and business cards have much higher interchange rates, because they are considered to be a higher risk.

If you process the transaction using your customer’s credit card number (because they don’t have their card with them), the interchange rate is higher. If you run an e-commerce business, you will also have higher interchange rates since the cards will never be present. The higher the amount the customer is purchasing, the greater the interchange cost.

Assessment Fees

These fees go to the card provider. They are a small percentage of the total transactions your business processed from a provider within a month. Each card association will have a different percentage for these fees, and the fees will be assessed differently based on whether the cards being used are credit or debit. Usually, these fees are not as expensive as interchange fees.

Payment Processors Fees

This is a fee that is paid to the card processor, such as First Data, PayPal, or Square. However, unlike assessment fees, this type of fee is charged per transaction. Typically, this is a flat rate, and it goes to the company for letting you use their equipment.

PCI Compliance

Sometimes processors will tack on a PCI (payment card industry) charge to make sure you are following all the proper security measures when taking cards. You can get charged non-compliance fees if you’re not taking security precautions, but you can also be charged a PCI compliance fee. This fee allows you to get support on how to stay compliant. Some processors only charge non-compliance fees.

So now that you understand what these fees are, you might wonder how you can reduce yours. One easy way to eliminate your credit card processing fees is to start surcharging your customers. With surcharging, you assess a small convenience fee to your credit card-paying customers.

If you want to implement this type of program at your business, contact Wholesale Payments Direct today! We can provide you with everything you need to get started and answer any questions you have about the service.