If you need to take credit card payments for high risk industries, then you’ve probably noticed that the fees can be massive. Even for relatively low risk industries, the few cents here and there can quickly mount up – and the fees in high risk niches can be even worse.
Sadly, paying some fees is unavoidable – but there are a few things that you can do to reduce the amount that you pay, and if you manage your accounts well over time you can get the costs down to something that is a little less painful for your bottom line.
Your goal should be to become an appealing business for your merchant account provider. You will be in a better position to negotiate if you can demonstrate that you have a high transaction volume and a low rate of chargebacks. Payment processors can negotiate with their own suppliers based on the volume of transactions that they are handling. The more volume you send, the more likely they are going to be to lower the rates that they charge you.
Put Ant-Fraud Measures in Place
Try to swipe as many cards as possible, and always enter the security information (such as the billing zip code) for every transaction. If you’re in a high risk industry, then you may want to take extra precautions, such as, if selling online, only shipping to the billing address. This will reduce the risk of charge backs and complaints, and will therefore leave you in a better position to negotiate.
Age verification, and account verification measures put in place for new customers will also go down well, and will reduce the risk of fraudulent transactions. When you’re a new business, having as many precautions in place as possible will help to ensure that you don’t end up getting hit by huge fes.
Cut Out the Middle Man
If you have the history and the credit rating to do so then you might want to go straight to the source for your transactions. Instead of using a third party processor, try to go direct to one of the payment processors. This isn’t always possible, but if you can do it then it could save you a lot of money because every step in the chain adds a little overhead.
Get Your Set Up Right
Make sure that your terminal is set up properly. One mistake that a lot of people make is that they set the wrong business type (having the right set up could mean that your industry risk profile is different), or they batch up their transactions and process them weekly, instead of daily. If you process daily you will have fewer transactions to process each period, and that could reduce the processing fees. Know more about Payment Processing
Get Expert Advice
There are lots of other tweaks that you might be able to do, depending on the niche that you’re in. It’s a good idea to get someone to come and look at your business and give you advice based on your own specific circumstances, because they will be able to tweak your set up based on your locality, volume, and the products that you sell. They might be able to help you negotiate better rates than you would be able to on their own. Don’t assume that just because you called your payment processor and got nowhere, that means that you are getting the best rate that is possible for your business. It could well be that you simply didn’t say the right things, and that with some advice from a specialist you will be able to either get a better deal, or manage to switch processor without having to worry about downtime or cancellation fees.
There are some companies that offer no-fee advice. If they save you money, then they’ll take a cut of the savings in payment. If they can’t save the business money, then there’s no fee for the advice that they give. This means that there’s no risk for the client. If you’re a high risk merchant and you’re tired of giving a huge percentage of every sale to a credit card processing company, then it makes sense to start shopping around. Read about high rated high risk merchant solutions .