Anyone that's read a credit card statement knows they are hard to follow and filled with industry-jargon like batch fees, AVS, PIN debit fees, etc. Furthermore, many processors are even known to mislabel fees, a practice referred to as "interchange-padding," in order to trick you into thinking those fees are unavoidable.
To help you tackle this problem, we've put together a few quick tricks to keep in mind next time you get your processing statement.
1. If You See the Word "Qualified" On Your Statement
If you see the words "qualified", "mid-qualified" or "non-qualified" on your statement you are probably on a tiered pricing plan. What this means is that your processor is charging you a fixed rate per "tier" of card and the reason they are doing this is most likely to pass on high, non-transparent fees. This is why we always suggest you choose an interchange plus pricing plan.
2. If You Have Flat Rate Plan
If you process more than $5,000 per month and are on a flat-rate you are probably paying too much. While flat-rate pricing offered by Square and Clover might be simple to understand, you should know that by choosing a flat rate you are likely going to overpay to the tune of thousands of dollars a year. That's because the rate they put you on is often significantly higher than the actual costs to process credit cards.
3. If Your Processing Rate is More than 2.10%
We've analyzed tons of statements and the vast majority of businesses should be able to process credit cards for less than 2.10% per month. Note that is almost 1% cheaper than flat rates offered by Clover and Square! This fee should also include ancillary fees like statement fees, support fees and batch fees.
4. If You are Leasing Equipment
Never lease equipment! This is just another tool for payment processors to charge you more than they should. Let us repeat. Never lease credit card terminals!
5. If Your Swipe Fee is More than $0.05
Some processors call it an authorization fee, others a swipe fee. Whatever it is, make sure it's below $0.05 per transaction
6. If Your Monthly Fees are More than $25.00
Monthly fees are a great way for merchant services providers to add in unnecessary charges. We've seen terms like monthly statement fee, monthly support fee, minimum fee, payment processing fee, etc. Whatever your payment processor calls them, they shouldn't be more than $25.00 per month.
7. If You have Any Annual or Termination Fees
Processors should earn your business, not keep you in a contract you want to get out of. That's why we believe in zero annual fees or termination fees. Also watch out for annual fees like regulatory product or annual PCI survey fees. Those are just additional ways for your processor to tackle on more charges than they should.
8. If Your Processor Ever Raises Rates. Ever
Don't let them fool you. Merchant services providers should never raise your rates. Many processors have seasonal rate increases or start adding fees in the hopes that you won't notice. That's why it's important that you check your processing statements on a regular basis. You should also know that any rate chosen on Zilment has a rate-lock guarantee, so you can rest easy knowing that the rate you see is the rate you get!
Zilment is a one-stop shop for merchants to shop some of the lowest credit card processing rates on the market. We believe great payment processing should be accessible to all, and that's why at Zilment you can find competitive rates from vetted payment processors, all at the click of a button.
You shouldn't have to pay to get paid.