Payment Solutions Archives

Do you know the average credit card swipe fee in America is around 2-2.5% of the transaction amount? It’s among the highest in the world. But do you also know that as business owners, you can avoid paying this fee by passing it on to your customers as a surcharge? Read on to learn more!

1. How credit card swipe fees are hurting American businesses?

Credit card swipe fees have experienced a significant increase of over double in the past decade. This surge can be attributed to the dominant market control of Visa and Mastercard, who collectively hold an 80% share. These fees are calculated as a percentage of each transaction, contributing to their impact on businesses and consumers. In 2021, swipe fees alone raised prices for the average American by a minimum of $900. Remarkably, swipe fees rank as the fourth-largest item in America’s sales expenses. While swipe fees are not a new concern, the issue has worsened during a time when Main Street businesses are grappling with changing macroeconomic conditions. Small business optimism plummeted to a six-month low in December, primarily due to the ongoing battle against rising costs. According to the Federal Reserve’s survey, banks face an average cost of 4 cents per transaction, regardless of the total ticket amount. Interestingly, swipe fees in the United States are among the highest worldwide. To address these concerns, the Credit Card Competition Act was introduced in Congress last year. However, it failed to become law before the conclusion of the congressional session.

2. How can business owners avoid credit card swipe fee?

Here are some ways to avoid credit card swipe fees:

Apply a surcharge. The easiest way to avoid paying credit card processing fees is by passing them on to your customer. There are several rules regarding surcharging that merchants must follow, so compliance is key ¹.
Capture more customer data ¹.
Swipe whenever possible ¹.
Offer ACH payments ¹.
Become PCI compliant ¹.
Check your statements ¹.
Ask your processor ¹.

3. What is PCI compliance?

PCI compliance refers to the technical and operational standards set out by the PCI Security Standards Council that organizations need to implement and maintain. The goal of being PCI compliant is to protect cardholder data and applies to any organization that accepts, transmits, or stores that data ¹ ². PCI compliance is important because it helps protect cardholder data and prevent fraud. If you’re not PCI compliant, you could be subject to fines and other penalties.

4. How to become PCI compliant

To become PCI compliant, a business typically must do three things:

Meet the requirements set out by the Payment Card Industry Security Standards Council.
Complete an assessment that shows how secure a business’s systems and practices are. Most small businesses can perform a self-assessment.
Perform a scan of the network used to process payments. This technical exercise requires the help of an outside firm ¹.

5. How can HTSwipe help your business save money?

As a leading merchant service provider, HTSwipe will give you the best payment solution to fit your needs. In addition to the traditional interchange plus pricing, we provide flat rate payment solution to nail salon, spa, restaurant and many other types of businesses. On average, our customers save thousands of dollars per month by switching to flat rate payment solution. In addition, we will help you to become PCI compliant so you can avoid paying fines and other penalties. Start keeping more of your hard-earned money today by filling out the form below. An associate will reach out to you within 24 hours.

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Low cost credit card processing is for low-risk merchant accounts

Low cost credit card processing is the number one benefit for businesses who are approved for low-risk merchant accounts. Can your company benefit from processing through a low-risk merchant account? Learn more about low-risk merchant accounts so you can concentrate on the finest processing choices for the characteristics of your company.

What constitutes as a low-risk merchant account?

A low-risk merchant account has a lower risk of fraud or chargebacks. It’s for businesses in low-fraud industries. It’s granted to businesses with good credit, stable processing, and low chargebacks. Low-risk accounts have lower fees and faster funding. Categorization is based on factors determined by payment processors. Different processors may have different criteria for low-risk accounts.

How to qualify for a low cost credit card processing?

You might discover that following a few steps enables you to qualify for low-risk merchant account processing, depending on your sector and business structure.

The following processes cannot be used by every business to qualify. For instance, businesses who exclusively sell their goods online will require high-risk merchant accounts. The fact that internet businesses pose a greater risk to payment processors means that there is, regrettably, no way to completely avoid it.

Use the steps below to assist your business become eligible for a low-risk merchant account if you run a brick-and-mortar operation.

1. Use the Correct Merchant Category Code

The merchant category code (MCC) you use to identify your business type. You should get in touch with each credit card company you accept to double-check your MCCs because they can change depending on the provider.

Visa, for instance, employs the subsequent MCCs:

7230: Beauty salons such as hair salon and nail salons
5499: Convenience stores and food stores
5511: Car and truck dealers (New and Used) sales, service, repairs, parts and leasing
1520: General contractors – residential and commercial

Why is your MCC important? The code helps credit card issuers evaluate whether you fall within the category of a low-risk or high-risk business because it informs them of the type of business you own. You are not qualified for a low-risk merchant account if you mistakenly utilize the MCC of a high-risk sector of the economy.

Furthermore, many credit card issuers provide discounted rates and fees for a number of MCCs.

Use the proper code to obtain the proper account and pay the proper fee. When you open a merchant service with HTSwipe, we make sure to use the right MCC code for your business type so you don’t have to worry about it.

2. Lower Your Number of Chargebacks

While it is natural for businesses to encounter some chargebacks when accepting credit and debit card payments, unfair chargeback policies can place you at a disadvantage. Nonetheless, there are steps you can take to proactively minimize the occurrence of chargebacks for your business. Below are some of the steps you can implement for your business:

Clear Communication and Transparency: Clearly communicate your policies, terms, and conditions to customers before and after the transaction. Provide accurate product descriptions, pricing, refund policies, and shipping information to avoid misunderstandings or disputes.
Reliable Customer Support: Offer prompt and reliable customer support to address any customer inquiries, concerns, or issues. Responding quickly and effectively to customer inquiries can help resolve problems before they escalate into chargebacks.
Enhanced Fraud Prevention Measures: Implement robust fraud prevention tools and systems to detect and prevent fraudulent transactions. Use address verification service (AVS), card verification value (CVV) checks, and risk scoring algorithms to identify and block suspicious transactions.
Clear Billing Descriptors: Ensure that the billing descriptor on the customer’s credit card statement clearly identifies your business. A recognizable and accurate billing descriptor reduces the likelihood of customers initiating chargebacks due to unrecognized charges.
Stay Compliant: Ensure that your business complies with card network regulations and industry standards. Adhere to best practices and maintain proper documentation to support your transactions in case of disputes.

3. Keep Your Average Credit Card Charge Low

It is advisable to maintain an average credit card charge below $500 whenever possible. However, it is understandable that in certain situations, you may not want to turn away high-value customers who wish to pay with a credit card. Nonetheless, it’s worth noting that having a high average credit card charge may be viewed as a higher risk factor by payment processors compared to businesses with lower averages.

Get your low cost credit card processing from HTSwipe

HTSwipe provides payment and marketing solutions for businesses of all types and sizes. If you operate a low-risk business such as nail salons, barbershops, convenient stores or restaurants, you might qualify for our low cost credit card processing. We have helped hundred of small business owners to maximize their ROI in a short period of time. Contact us today to see how we can help to lower your monthly credit card processing fees. You could save thousands for your business!