You probably think you know everything about credit card processing. You probably felt like you did your research, selected a company or bank that could process credit cards for your business and as long as you are getting paid in a timely manner, everything is probably okay. It could be. But, chances are you may not know about these four secrets that can save you money and send more money to your bottom line profit or pocket rather than being spent on administrative fees to run your business.
#1 – Processing fees are tax deductible. As you prepare your tax return for 2017, make sure you include the fees or take your processing statements to your accountant or tax preparer.
#2 – Using your bank for credit card processing is the absolute worst choice for processing. Banks do not process credit cards. They outsource it to companies like Chosen Payments to do it for them. The bank then marks up our fees to pass them on to their customers. This ends up costing you more. In fact, no one charges more to process credit cards than banks. Even if you think it is part of a great business banking package, it isn’t. When unbundled from the package it is much higher.
#3 – Only one part of your credit card processing is negotiable. That is the processor’s markup over interchange and assessment rates. Those rates are set by card issuers such as Visa. The interchange and assessment fees are the same for all credit card processors. We are required to collect and pay these fees to Visa, MasterCard and others and neither Chosen Payments or any other card processor can change or negotiate these rates.
#4 – Failing to use AVS (Address Verification System) will definitely cost you more money. Visa, MasterCard and Discover require a customer’s billing address be entered for all transactions where the card is not present. If you don’t use it, you are penalized with a higher fee for increasing a fraud risk.