Running a business comes with a vast array of costs. In addition to paying your taxes and employees’ wages, you might have to rent or buy some retail or office space and purchase the raw materials to produce your product. On top of all this, merchants pay expensive credit card processing fees, which can sometimes amount to 3% or more of the total sale price.

Although a small charge is unavoidable, most businesses are paying more than they have to. Because profit margins are often thin, it makes sense to reduce your fees as much as possible. So, how can you get started? What is the easiest and most effective way of cutting down on fees? Today, we’ll have a closer look at how a company like Main Street Back Office can help.

How to Reduce Your Credit Card Processing Fees

The credit card industry is unregulated and inefficient for most small and medium-sized businesses. Every time a customer pays you via their credit card, you lose money to fees from your bank, their bank, and the card network. While a small cost is acceptable and even necessary, most merchants pay too much, often between 1-3% of the total price of the item.

While you can try and lower your fees on your own, this can be a challenge and take up a lot of time for a small reward, especially while your business is new. A better solution is to sign up with a company like Main Street Back Office, which can negotiate with credit card companies on your behalf. In total, we have saved our customers over $100 million.

How a Credit Card Transaction Works 

Most people use credit cards, but they don’t actually know how complex the transaction is. When a customer pays with their card, the merchant has to request authorization from their bank. Then, the merchant’s bank requests authorization from the card network, which requests authorization from the customer’s bank, also called the issuing bank. If the transaction is approved, the issuing bank transfers the money, but it takes a fee.

For a $100 transaction, this might be $2.20. The card network and the merchant’s bank also take a cut, although this is usually smaller. In the end, the merchant might receive approximately $97.25. This is how the banking industry makes $90 million in the US every year. As you can see, the process is very inefficient for sellers.

The Easiest Way to Reduce Your Fees 

Fortunately, there is a simple way to reduce the amount you pay and avoid being overcharged. When you get in touch with Main Street Back Office, we can offer you an assessment, so you can discover whether you could save money. Since we only take payment from you when we save you money, you won’t be charged for this initial evaluation.

If it turns out that you are overpaying, you can sign up to our service. We will monitor your accounts on a regular basis to make sure you’re not paying more than you absolutely have to.

What Are the Benefits of Working with Main Street Back Office?  

72% of merchants pay too much in credit card fees. But is this a problem worth solving, or would you be better off focusing on something else? Instead of trying to reduce your fees by 0.5-1%, should you make an effort to grow your business? The answer is that you can do both when you use a service like Main Street Back Office.

Because we navigate the world of credit card fees for you, you can benefit from better rates without spending any time on this issue. Additionally, we will watch out for credit card processor mistakes, which can have a profound impact on your business.

Time and Money Saved

The primary reason why our customers love working with us is that we can save them both time and money. While it might be inefficient for you to try to reduce your credit card processing fees on your own, there’s no reason why you shouldn’t team up with us. We will work to maximize your profit behind the scenes, and you can spend your time doing what you do best: providing your customers with a great experience.

If you’re a startup that doesn’t have much profit yet, you might wonder whether the small amount of money you save is worth it. But remember that the results of our work are scalable. As your business grows, the small percentage we save you can add up to hundreds of thousands or even millions of dollars. By getting started with us now, you can make sure to maximize your profits for years to come.

Low Cost 

There is no risk involved in collaborating with us because you won’t pay us if we don’t save you money first. Our fee structure is designed to reward us when we help out our clients, so everyone is working towards the same goal. Once you’ve started saving money on credit card fees, we will take a small amount of the profit to compensate us for our hard work. Despite this, the majority of our clients experience significant savings, especially as their business grows.

Protection from Credit Card Mistakes 

Accepting credit card payments can be rewarding, but it also comes with risks. One of the biggest is the chargeback, which is when the credit card provider asks for the money back, for example, because a customer wasn’t happy with your service. You usually have to pay the outstanding amount and the fees out-of-pocket, which reduces your profit margins. What’s more, having many chargebacks can reduce your trust score with your community.

While some chargebacks are legitimate, others are caused by a payment processing error. They are very hard to reverse, and many business owners never get their money back. Here at Main Street Back Office, we can help protect you from this issue by encouraging you to keep your hardware and software up to date and helping you understand the rules related to processing payments. We will also be the first to spot discrepancies on your account.

Easy Ways to Reduce Fees and Save Money 

Almost every small or medium-sized business accepts credit cards nowadays. It is estimated that over a quarter of all payments are charged to a credit card. While these transactions are expensive for you as a merchant, it’s hard to avoid them because you lose out on a large portion of your customers when you don’t allow them to pay by card.

There are several ways to reduce your fees. To get started, you should work with an expert who can explain all the rules and regulations to you. They can also help you configure your terminals. If you allow your customers to pay online or you work in an area where a lot of fraud occurs, you should consider using an address verification service.

Know All the Rules and Regulations

Familiarizing yourself with all the relevant rules and regulations is key because it helps you to avoid problems and high fees. Most merchants are excellent at providing their products and service, but they know very little about the legal aspects and requirements related to credit card processing. This makes their business less efficient and reduces their overall profit margins.

If you’re not sure about how to start accepting credit cards or how to make sure you’re following all the best practices, you should reach out to a professional. A credit card expert can explain the process, analyze the fees you currently pay and let you know how these could be optimized. They can also determine whether your business is at risk of fraud or processing errors.
 

Configure Your Terminals Well

When you first begin accepting credit cards, you’ll need to configure your account and terminals. Don’t hesitate to spend some time on this or ask credit card experts for help. Wrongly configured terminals can lead to higher fees and an increased risk of issues with your credit card provider. Additionally, you should consider processing your transactions within 24 hours. This lowers the number of transactions and, therefore, your processing fee.

Use an Address Verification Service 

One way your credit card expert might be able to reduce your fees is by encouraging you to use an Address Verification Service (AVS). This is designed to lower the incidence of fraud by verifying the cardholder’s address with the card issuer. It is mainly used in e-commerce, but you might be able to incorporate it into your in-person business if there is a high risk of fraud in your area.

To complete an AVS, the customer has to enter their address, which should match the one the issuing bank has on file. The merchant is then sent a code, and they can use this to either approve or reject the transaction.

Credit card processing fees can reduce your profits by up to 3% per transaction. Many of these costs are unnecessary and could be cut out. The best way to find out whether you are currently overpaying is to get in touch with an expert and have your business assessed.