When determining which credit card processing service is best for your small business, make sure you understand the fees involved. Specifically, you should know about Payment gateway fees, monthly subscription fees, and Interchange plus fees. You should also know about the security measures taken to protect your customers. You can start your research by comparing credit card processing rates on the Internet.
Payment gateway fee
When you’re looking for a payment processor for your business, it’s a good idea to compare different companies. While it might be tempting to provide personal information like bank account information or sign an application, you should never do so before getting a full pricing quote and contract. Signing up for a credit card processing service is a legal contract and should only be done if you’re absolutely sure that you want to sign it.
You also should ask about fees related to international transactions. Some processors charge a flat monthly or annual fee. Other processors may offer waived fees for the first year.
Interchange plus fee
In addition to the monthly processing fee, you may also be asked to pay an interchange plus fee. These are charges set by the card networks that issue credit cards. These fees are passed on to the merchant as a part of the wholesale cost of processing the transactions. The fee can range depending on the type of transactions.
The average interchange rate is about 1.5%. If you choose a merchant account provider that charges interchange plus fees, then your final cost will be 1.5% plus a percentage fee. When you calculate your total processing costs, you need to multiply the interchange plus fee by the number of sales.
Monthly subscription fee
Subscription-based pricing models allow merchants to pay a monthly subscription fee rather than paying a per-transaction fee. These pricing models differ from interchange plus pricing, in which the processor takes a cut of the transaction fees. Subscription fees are more predictable and less volatile than transaction fees. These fees are set by the credit card companies, network, and payment processors. These fees may include markups and other fees.
Monthly subscription fees don’t eliminate the cost of additional credit card processing, but they do make planning much easier. Monthly subscription fees can also be more affordable than tiered pricing models. Some companies have a minimum contract requirement, and others charge a flat rate based on the number of transactions. Monthly subscription fees can be an attractive option for smaller businesses, but make sure to understand exactly how much each service costs before making a decision.
Security measures
Processing credit cards for small businesses is becoming a standard practice, but there merchant services los angeles are also some things small business owners can do to keep their customer information safe. Credit card fraud is an increasing problem for all businesses, but small businesses are particularly at risk. Many hackers target these businesses because they do not have the resources to invest in top-tier security measures. These breaches can cost small businesses tens of thousands of dollars and can ruin their reputation.
The most important security measures for credit card processing for small businesses include a secure network and limiting employee access to sensitive information. In addition, small businesses should use separate devices for business and personal use. They should also install anti-malware software and use strong passwords. Two-factor authentication can also be used to protect against fraudulent credit card use. Tokenization is another way to secure payment credentials. Instead of storing the credit card numbers of each customer, the payment processor will replace them with a mathematical representation.