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How to Shop for Merchant Credit Card Rates

by Devra Gartenstein

Overview

In order to shop for merchant credit card rates, you first need to understand merchant credit card fee structures. Merchant services companies, or companies that handle and process credit card transactions, charge fees for each individual transaction as well as percentage fees based on the amount of each transaction. They also charge batch fees on groups of transactions that you transmit together, and they sometimes charge monthly fees. Merchant services fees can also vary based on whether you physically swipe each credit card, or whether you enter the number by hand, as with a telephone or Internet sale.

Step 1

Contact a variety of merchant services companies. A cursory Internet search can provide you with plenty of potential options. Also contact the bank that handles your business banking accounts and ask them about their merchant services fees. Ask about the fees per transaction and per batch, as well as their percentage fees on swiped transactions and for transactions that you enter by hand. Rates for keyed transactions, or transactions that you enter by hand, tend to be higher than those for swiped transactions because they involve a higher degree of risk for the merchant services company. Also ask about monthly fees, and whether they offer better rates if you meet a minimum sales volume.
Step 2

Evaluate the needs and patterns of your business with respect to credit card transactions. If you make a large number of small sales, you will spend less if you have a fee structure that has a low fee for each individual transaction. If your business makes a relatively small number of large sales, then you should choose a company that has a low percentage rate on the dollar amount of each transaction. Also consider whether you key or swipe most of your transactions, and the ways that this can affect your monthly fees.
Step 3

Choose a company whose fee structure makes the most sense for your business volume, the number of transactions that you process and the types of transactions that you process. If possible, figure your monthly fees using the fee structures of a range of companies before choosing the one that makes the most sense for you.