It can seem unfair to be charged money simply for the privilege of accepting credit card payments at your small business. After all, not accepting credit cards could result in a significant amount of money left on the table and often isn’t feasible when your goal is to generate enough revenue to keep your doors open.
To be fair, there are numerous middlemen and processes that occur behind the scenes to enable every credit or debit card purchase. But any business owner wants to save money, especially for intangible services like credit card processing. So, how can you obtain credit card processing for your small business with no monthly fees? The answer lies in the agreement you have with your current Merchant Account Provider and the commitments noted within.
It bears repeating that an elaborate, technical dance occurs every time a customer pays you with a credit or debit card.
In brief, the numerous facilitators include the following:
All of these providers help facilitate transactions. But we all know that there’s no such thing as a free lunch. You’ll see some fees in your statement that are known as “pass-through” fees. Usually, one provider assesses these fees and charges them to another, which ultimately passes them down to you.
Now that you can appreciate the reasoning behind standard monthly fees like dues and assessments, we’ll dive into the monthly obligations or terms that could result in monthly fees.
The following fees all pertain to agreements that should be disclosed in your merchant account contract. It’s recommended that you read your proposed contract thoroughly before signing it to ensure that you’re aware of and comfortable with all terms. This will help you sidestep any unsavory contractual terms like terminal leases, auto-renewal clauses and termination fees.
These fees are all tied to your processing volume (a.k.a. the monthly total of your credit card transactions).
If these requirements sound unfair, the good news is that some providers don’t charge these fees. To reiterate, this is why it’s so important to review all terms before partnering with any Merchant Account Provider. If you have a patchwork of providers (say a separate Merchant Account Provider and Payment Gateway), it’s all the more critical that you confirm whether these monthly fees are assessed with every provider you have. Otherwise, a monthly fee might pop up in more than one of your monthly merchant statements.
Additionally, not all providers charge exorbitant monthly fees. Consider how the fees noted above will be calculated and what your expected average volume will be before agreeing to any terms that will result in a monthly fee.
Does your business get hit with multiple monthly merchant fees? Have you asked your provider about ways to waive them? We’d love to hear from you!