Over the past 20 years, the use of debit and credit cards has grown significantly. Since debit and credit cards offer consumers better protection than cash or check transactions, many customers prefer this method of payment. However, while debit and credit cards may be easy for customers to use, they can be expensive for businesses and organizations that accept them. In many cases, processing a credit card transaction can cost a business a fee of one to three percent – which can be hugely expensive if they sell big-ticket items like cars, jewelry, home appliances, or medical services. However, this fee will vary based on a wide variety of factors. So, how does one calculate the overall credit card processing rate that’s being charged? While Payment Depot’s plans are cheap and contain no hidden fees, we can’t say the same for many of our competitors. Here are a few of the things that you should take into account when calculating your overall processing rate.
For example, some businesses receive cash and checks as a primary payment method. If a business doesn’t use a lot of credit or debit cards, it’s usually a good idea to choose a processing company with low annual/monthly fees. However, low annual fees are often counterbalanced by higher per-transaction costs. In some cases, transaction costs can be as high as five percent!
Companies that sell non-tangible services and products are sometimes charged higher fees by processing companies. For example, this can include online subscription services, web hosting services, email services and more. Since the goods for these services don’t have to be delivered to a physical address, the risk of fraud becomes significantly higher. If a company is processing international credit card numbers, processing companies must assume a higher degree of risk, and so will charge higher rates. Payment Depot’s processing fees, on the other hand, are low, transparent, are equally available to all businesses we serve.
Most important of all, it’s essential to research any hidden fees associated with a credit and debit card processing company. Many companies will charge fees for balance transfers, returned transactions, technical support phone calls and much more. While these fees may not seem very high, they can quickly add up over time. Some processors even charge cancellation fees if you want to take your business elsewhere!
One of the best ways to determine the total fees one can expect to pay is through the use of a fee schedule calculator. Many credit and debit card processing companies offer a fee schedule calculator for prospective customers. This tool allows businesses and organizations to see how much it will cost to user a processing company’s services. By plugging in an estimated number of transactions and average daily sales, it’s easy to see how much you will pay in processing fees over the course of a year. Try Payment Depot’s Instant Savings Calculator to see this process for yourself!