Q&A: How to Cut Your Company's Credit Card Fees
Accepting credit cards can be a tricky proposition. But figuring out how to cut your credit card fees can be even more difficult.
FeeFighters.com, a comparison shopping website for credit card processing, helps businesses shop around by helping them compare prices. Sean Harper, founder of FeeFighters, tells BusinessNewsDaily how businesses can save money on credit card transactions.
BusinessNewsDaily: What's the biggest mistake companies make when accepting credit cards ?
Sean Harper: Many businesses don't comparison shop when choosing a payment processor, and instead trust an agent or salesperson. They don't read the fine print and sign off on terrible terms that cost them thousands of dollars in extraneous fees each year. Always get multiple offers and compare them on an apples-to-apples basis, otherwise you are asking to be taken advantage of.
BND: Are there ways to save on credit card processing costs?
S.H.: Absolutely. The more business owners know about credit card processing, the more they can leverage their knowledge in negotiations with credit card processors. For example, if business owners know to ask for interchange plus pricing, a type of pricing that is the most transparent but most people don't know about, they will instantly be able to save money. Also, any credit card processor can waive cancellation fees -- you should never agree to a cancel or termination fee. If the processor isn't doing a good job and you want to switch, you should be able to without penalty, it's only fair.
BND: How much responsibility do companies have for credit card fraud?
S.H.: There are two fraud risks:
A, someone uses a stolen card at your business. You are liable for the fraud in this case when the card was not present and signed for at the time of the transaction. This means that for any transaction conducted over the internet or phone, the business is liable to pay the owner of the stolen card back for the purchase, not Visa and MasterCard. For in-person transactions where the magnetic strip data from the card was captured, the business is not liable.
B, the risk that you store your customer’s credit card numbers and then those numbers are stolen. Both in-person and Internet businesses are liable for cards stolen in that way. For most small businesses it makes sense to outsource storing this data since the fines for losing it can be quite steep.
BND: Are there advantages to accepting credit cards?
S.H.: There are very few businesses that can get by without accepting cards, people expect to use their cards everywhere and card usage increases every year. Even areas like fast food and business service providers, that have historically not taken many cards, now do.
BND: What's the best way to find a credit card processor?
S .H.:The best way to find a credit card processor is to comparison shop on FeeFighters.com. Just like you check kayak.com to get the best price on your plane tickets, or Lendingtree before getting a new mortgage, FeeFighters is the easiest, best way to ensure you are getting a good deal on your credit card processing.
If you don't want to use FeeFighters, you can replicate our instant reverse auction by contacting a dozen reputable credit card processors and manually bidding them off against each other, but it is a lot easier and safer to let our software do the work for you.
BND: What's the most important thing to look for in a credit card processor?
S.H.: Credit card processors price their services on a customer-by-customer basis. They add in extra fees and downgrades when they think they can get away with it. The most important thing is to ensure you know all the fees you will be charged, have calculated how much those fees will cost you given the characteristics of your business and are comfortable with the result.
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