Accepting credit card payments translates to convenience for your advertisers—and it’s not a practice you should give up. Unfortunately, the processing fees that are taken out of each payment are a seemingly inescapable cost of doing business.
However, the inevitability of credit card processing fees doesn’t prevent you from trying to negotiate for a lower fee.
Calculating Your True Credit Card Processing Fee
Credit card processors often advertise rates that can include all types of extra fees or add-ons. Here’s how to calculate your true credit card processing fee:
- First, grab your last credit card processor statement.
- Second, calculate the total fees charged on the statement.
- Third, divide the total fees charged by the total amount of revenue charged on the statement.
While it’s a simple equation, it’s important to note that the total fee percentage can often be different from the advertised percentage. When shopping around, be sure to look for flat fee percentages as opposed to those subject to conditions or extra fees.
You Have Negotiating Power in the Credit Card Fee Game
Take a look at the percentage rate your credit card processor is taking from your credit card payments. Many processors are now offering flat fee percentages in the vicinity of 2.9% – where are you?
It’s time to do some negotiating if your processing fees are somewhere over 3.1%. In other words, your credit card processor and tell them you want a lower fee. Cite the alternative processors you see offering that rate. After that, see what your processor has to say. In many cases, they will lower their rate to retain your business.
In conclusion, pat yourself on the back if you can land a fee within a tenth-of-a-percent of the most competitive flat rates you can find. As time goes on, you will take in more cash per transaction—all without going through the logistics of switching processors. Who can argue that!?
In Publishing, Efficiency Is Everything
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Join the conversation on our Community for Media Sales Slack channel. And if you’re interested in learning how our software can help your media business drive more revenue, schedule a personalized demo of Ad Sales Genius today.