Where to Get the Lowest Credit Card Processing Fees for Small Businesses in 2022

October 11, 2021 / Posted in Credit Cards

Whether your buyers operate online or purchase the goods you offer in a traditional brick-and-mortar store, knowing about the lowest credit card processing fees is a must. Take a deep dive into these facts and answer your main questions – What are the lowest credit card processing fees, what is the difference between interchange, flatrate, or assessment expenses, and, more importantly – how can you use this knowledge to save up?

Why Enabling CC and Other Payment Options Is a Smart Decision and How It Can Affect a Sales Increase

In the US, cards are definitely the most used payment method, where 38% of all sales are done this way. This data shows that all-size businesses simply can not avoid enabling this option for their customers, whether they operate brick-and-mortar or online.

Moreover, when it comes to eCommerce payment options, it is highly recommended to enable as many options as possible and motivate the customer to finish the purchase. The average cart abandonment rate is high (69.80%), and one of the most common reasons why customers are abandoning their online carts is the lack of options for paying. For that reason, finding a merchant services company like Merchant Chimp to provide you with multiple solutions will help you find a way to attract more buyers.

A woman buying goods over the phone

Learn All About What You’re Paying the Processor and Which Credit Card Processing is Cheapest for a Small Business

Nowadays, all virtual and many on-site businesses consider cashless payments an integral part of their offer. And although there are many advantages to such an approach, there is a lot to learn before embracing the fact that plastic makes the world go round.

In order to obtain further insight and valuable information, you must learn exactly how CC processing works. Basically, it all starts with your company allowing its customers to use cards to realize payments. Then, you must have a merchant account that will allow you to enable the payments, collect the necessary information and proceed with the transaction smoothly. Now you know the basics, here comes the next step!

Next, the merchant service company processes the needed data and requests authorization to confirm that everything is being done correctly. Moreover, it keeps the interaction between all parties running smoothly and it helps you deduct expenses. Lastly, you should have an acquiring bank, which uses merchant services to connect to issuing banks.

The Types of Fees and Factors that Affect the Average Fee Small Businesses Have to Pay Processors

When it comes to choosing a merchant services provider, you should know what a good effective rate for CC processing is. Firstly, make sure to check all the types of expenses they charge because they inevitably affect the pricing model.

Factors like monthly/yearly turnover, the industry you’re in, PCI compliance, chargebacks, and annual account charges impact the total cost. Here are the most usual fees:

  • Interchange fees consist of two components. The percentage the bank will charge for handling the transactions and processor markup – an expenditure toward your service provider who processes the whole deal.
  • Flat rate implies charges per transaction, i.e., each time a customer uses plastic, the fee is charged. The charge ranges from 75-2.9% + 30 cents per swipe. This plan is the best for businesses whose turnover per month ranges from $5,000 – $8,000.
  • Assessment fee – the amount processors collect from merchants and pay to card networks that manage transactions. Those are charged based on total monthly sales.
  • Monthly fee expense – the last one largely depends on your account plan.

Typically, the average credit card processing fees can range from about 1.3% to 3.5% – in addition to the payment and acquirer processor fees. Also, these tariffs are the only ones that are negotiable. And if you were wondering which provider gives the most beneficial conditions, you will find that American Express is the most costly one to handle, while Visa is the cheapest. Here is how major brands charge:

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Other Hidden Costs That Affect the Pricing

Aside from the mentioned expenses, don’t forget to check with processing companies details like what services they charge and which ones they provide for free. Here are the potential hidden expenses you should keep an eye for:

  • Payment gateway,
  • PCI Compliance fee,
  • POS software,
  • Hosting fee,
  • Wireless access fee,
  • Address verification system,
  • Monthly statement and service support,
  • Monthly minimum fee.
A pile of cards on a desk ready for credit card processing services

Can You Get the Lowest Credit Card Processing Rates for Your Business?

If you’re trying to find out information like – how can I avoid credit card processing fees, here is the answer. They can’t be avoided. As a business owner, you’ll need to pay them. The good thing is – those rates don’t have to be enormous and negatively impact the final business income. Because of that, gathering information about the average CC processing fees is paramount. That way, you can be in the loop and plan your budget according to the findings and your actual needs.

Best Ways to Get the Lowest Merchant Credit Card Processing Rates

First, know your goals and your precise state of affairs. Then, before choosing a provider, make sure that you have a clear understanding of your volume of work and the way you intend to allow cashless payments.

Once you have thoroughly analyzed your needs and objectives, start your research by exploring various service providers and comparing their prices. But do keep in mind that the lowest merchant fees sometimes don’t mean that you’ve got the best deal. Be sure to mind the reviews and do your homework meticulously. After all, security comes first since the lack of it can cost you more in the long run.

The Best Way to Get the Lowest Payment Processing Fees

When aiming to boost your earnings, knowing how to keep your costs low and finding the lowest rate credit card processors is a vital task to tackle. Here are the most effective solutions to reduce transaction expenses.

Encourage Customers to Pay in Person – This Is the Cheapest Option

The way the transaction is processed influences the rate you will be charged at the end of the month. In-person card-present transactions at the point of sale (POS) typically have the lowest credit card transaction fees.  On the other hand, card-not-present (CNP) transactions made online, over the phone, invoices, or mail orders are charged more. If your firm is in the transition period from brick-and-mortar to e-commerce business models, it is completely understandable why you would try to motivate customers to pay online.

Extra tip: When it comes to pricing, fees for debit cards are lower than credit ones, so ensure to have this option too!

Minimize the Risk of Chargebacks to Get the Lowest Merchant Credit Card Processing

The more chargebacks a company has, the more likely it is to be considered a higher-risk business and charge more by banks and merchant service providers. To avoid possible frauds, ask the customer to sign an authorization form – a document that states you have permission to fulfill the transaction, and this will be the best credit card fraud prevention.

Use a Merchant Services Provider Rather Than a Bank

When using a merchant service provider, you’ll cut one middleman in the chain of providers and reduce the charges because all the transactions will be processed directly. Furthermore, a provider will supply you with a merchant account that will ensure a safe process.

Banks usually contract a third party to process the transactions and charge the businesses more. This is especially important to know if you plan to develop online payments because merchant service providers will have a better offer compared to banks.

Person using a credit card in a business

Bonus Tips for Finding the Best Provider

Although every business owner looks for the cheapest options, this shouldn’t be your primary goal. Cheap or free services and low rates aren’t necessarily good for you. When looking for the lowest-cost credit card processing, be sure to pay attention to other aspects of your choices. Quality should always come first – and this is exactly what Merchant Chimp’s strategy implies. Here’s what you need to know:

  • Look for transparency,
  • Learn the difference between interchange, assessment, flat rate, and other fees,
  • Learn about the difference between fixed costs (that Visa or MasterCard require) and what good rates for credit card processing are,
  • Find a company that’s within your price range, but don’t focus solely on the cost,
  • Be familiar with the terms and conditions and make sure to go over the contract meticulously before signing it,
  • Get proficient with the terminology and research the market to gain all valuable insight,
  • Be aware of various payment methods and what each one brings to the table,
  • Know your precise needs and keep in mind that the volume will remain negotiable.

Pick a Provider That Offers Transparent Pricing Plans

Finding the best CC processing for a small company isn’t hard. You just have to follow a few proven guidelines to achieve the desired result. With Merchant Chimp, you’ll be provided with a transparent pricing scheme. Every time you receive a merchant statement, all the items on it will be clearly listed. Don’t hesitate to contact us, tell us everything about your business, apply for a merchant account, and find the right option to increase sales and boost your income!


It never hurts to know how much you can save.

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