How to Reduce Payment Processing Fees in 8 Easy Steps

For most business owners, payment processing fees are an unavoidable expense. However, understanding where costs come from and how to optimize your merchant services can lead to significant savings without compromising reliability or security. In this guide, we’ll explore key strategies to reduce payment processing fees, eliminate hidden costs, and optimize your payment setup for maximum profitability.

In this brief guide we will review the easiest ways to make sure that you are not paying too much for your payment processing fees.

1. Understand Your Merchant Statement, Payment Processing Fees

how to reduce your payment processing fees in 8 easy steps

Your merchant statement breaks down processing costs, but it’s often filled with complex terminology and hidden fees. Here’s what to look for:

  • Interchange Fees – Set by card networks (Visa, MasterCard, etc.) and non-negotiable.  You will need to cross reference these with the card brand’s published Interchange Charts to verify that there are no hidden fees here.
  • Processor Markups – The fees your payment provider adds. These are negotiable.
  • Monthly & Annual Fees – Look for unnecessary charges merchant club, prevention, or abnormally high PCI and Annual fees.
  • Fluff Fees – Extra fees with no real value, such as statement fees, batch fees, and regulatory fees that are often unnecessary.

Tip: Request a fee audit from a transparent provider like Bankcard International Group (BIG) to ensure you’re not overpaying.  Most service providers will simply promise you lower rates, but 6 months later you are paying even more! 

2. Choose the Right Pricing Payment Processing Fees Model

Not all pricing structures are created equal. Consider these models:

  • Flat-Rate Pricing – Simple and predictable but often more expensive over time.
  • Tiered Pricing – Often misleading, with higher costs for certain transactions.
  • Interchange-Plus Pricing (Recommended!) – Transparent, with the lowest possible markup over interchange fees.

Tip: Switch to Interchange-Plus Pricing to lower costs and increase transparency.

3. Identify & Eliminate Fluff Fees

Many merchant service providers sneak in junk fees that add up over time. Here’s how to find and remove them:

  • Statement Fees – Some providers charge $15–$25 per month just for sending a statement. Opt for electronic statements instead.  Also be on the lookout for “On File” fees in addition to your statement fees!
  • Batch Fees – Daily batch fees for settling transactions can be unnecessary. Ask if these can be waived.
  • PCI Non-Compliance Fees – If you’re PCI compliant, you should not be charged this fee. Ensure you complete PCI requirements to avoid penalties.
  • Regulatory Fees – Some processors add vague “regulatory” or “network” b that aren’t required. Ask for a breakdown and justification.
  • Customer Service Fees – If you’re paying extra for basic customer support, consider switching to a provider that includes this service at no charge.
  • Fluff Fees – Such as “Customer Intelligence Suite Fee” or “Infrastructure Fees” are 100% fluff and can be eliminated.

Tip: Compare your merchant statement month-over-month to spot inconsistencies or sudden fee increases.

4. Reduce Chargebacks & Fraud Risks

Chargebacks can be costly. Here’s how to minimize them:

  • Implement secure payment gateways with fraud detection.
  • Use clear billing descriptors to avoid customer confusion.
  • Provide easy refund options to prevent disputes from escalating.

Tip: Work with a payment processor that specializes in fraud and chargeback prevention to protect your business.

5. Optimize Your Payment Methods

Different payment types come with different costs. Here’s how to save:

  • Tap or Dip Every Transaction – To avoid Interchange downgrades and potential payment processing fees penalties.
  • Encourage ACH payments – Lower fees than credit cards.
  • Use PIN debit instead of signature debit – Depending on the volume of your debit transactions this can lower interchange rates.
  • Offer surcharging (where allowed) or dual pricing – Pass fees to customers legally and compliantly.
  • Make sure your business is boarded with the proper MCC codes – This can reduce your interchange cost.
  • Collect the maximum amount of information on every transaction – By making sure that your gateway, software, or terminal is capturing as much information as possible interchange downgrades can be reduced.  Your processor is in charge of ensuring this.

Tip: Bankcard International Group offers ACH solutions and transaction optimization that reduce processing costs significantly.

6. Avoid Unnecessary Equipment & Gateway Fees

Some providers charge excessive monthly fees for equipment leasing or payment gateways. Here’s how to cut costs:

  • Own your terminals instead of leasing or renting – Lease agreements are very difficult, if not impossible to get out of and you will pay hundreds (if not thousands) more for a terminal than you should.
  • Gateway Fees can often be reduced or eliminated – ask your representative what can be done for any gateway fees.
  • Review your monthly statement closely (EVERY MONTH) by reviewing your monthly statement carefully every month you will be able to identify anomalies or increases in fees. 

Tip: The last page of your statement will contain information regarding increases in fees or fee structures in small print – read it every month.  If there are increases coming contact your representative immediately and opt out of them!

7. Negotiate Your Processing Rates

Many business owners don’t realize they can negotiate certain fees. Here’s what to ask for:

  • Lower processor markups – Compare rates from multiple providers.  (But be careful because there are many confusing billing schemes that can make this impossible).
  • Waived monthly or annual fees – Many fees can be eliminated.
  • Volume-based discounts – If your business processes high volumes, leverage that for lower rates.

Tip: BIG offers customized solutions with competitive pricing based on your business needs.

8. Work with a Transparent & Competitive Merchant Services Provider

Not all payment processors have your best interests in mind. Look for a provider that offers:

  • No hidden payment processing fees or deceptive pricing.
  • Personalized consultation to ensure you’re getting the best rates.
  • Reliable customer service that supports your business needs.

Tip: Bankcard International Group specializes in helping businesses save money while providing secure and compliant payment solutions with the customized service level your business deserves.

Start Saving Today!

By taking control of your merchant services, you can cut unnecessary costs, reduce risk, and improve your bottom line. If you’d like a free merchant statement review, reach out to Bankcard International Group today and discover how much you can save!

Contact us for a Free Consultation!

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