When it’s time to find a company to help you start accepting credit cards for your small business, you’ll naturally want to shop fees. Also naturally, a business owner that is doing that shopping is far more likely to choose the lower rate over the higher rate, unless there’s a good reason to pay more. When credit card processing companies decide how they price their services, then, their goal, by and large, is to offer the lowest, most attractive rates and fees. In our world, that means two numbers that rise above all in importance:
These are the numbers that are nice and easy to line up and compare when deciding between the various credit card processing companies, but sometimes, the story doesn’t end there… There are two ways that some companies complicate their payment structure so that you assume that the two simple fees above are the end of the story. There may also be confusing fees and hidden fees that turn up surprising you when your statement comes through.
Here are a few terms to look out for when you do your deep dive into the details of a payment processor: Qualified / non-qualified rates, or tiered pricing. Transactions from different types of cards are more or less expensive to process. Some companies use this as an opportunity to pass some of that extra expense on to the business owner. A more transparent (or at least less cumbersome) way of charging is a flat rate, which considers the average price of processing the different transactions (it’s almost always cheaper for you the business, too).
When it comes to fee structures, both parties should be able to understand them easily. Anything less is unfair. If it’s time to start accepting credit cards for your small business, consider the transparent, flat-fee structure of Moolah as a good alternative to the confusing and the hidden.