If you can negotiate a rate near any that the companies above use, then you’ll have yourself a really good price. In fact, it’s worth stating the rates of competitors in the sales call so the salesperson has an idea of the kinds of services and prices you’re considering.
One thing you may notice about the table in the previous section is that the better the rate, the higher the monthly fee. Some processors don’t even charge a monthly fee. Square, for example, just charges a high flat-rate transaction fee without a monthly fee.
But here’s the thing, if you start by negotiating a good processing rate and you keep your monthly fee at a reasonable price, your out-of-pocket costs will get cheaper as you process more transactions. So if you already make a lot of sales every month, a reasonable monthly fee won’t be too much of a problem with a good interchange-plus pricing rate.
Monthly fees generally range from nothing to $99 per month. And at $99, the processing fees should be really cheap (see Fattmerchant in the table above).
That said, businesses that don’t process a lot of transactions will probably just want to negotiate a flat-rate processing fee with no monthly payment.
Extra fees can turn a good deal into a bad deal. There are some extra fees that are unnecessary and used to nickel and dime businesses and some that are there for a reason. We’ll start by talking about the fees you should avoid:
- PCI compliance fee
- Setup fee
- Minimum processing volume fee
- Cancellation fee
- Batch processing fee
- Statement fee
Processors may give reasons for charging these fees, but don’t let that persuade you. If you see any of these fees in your contract, ask to have them waived as they are dated and unnecessary. There are tons of companies not charging these pointless fees, including Fattmerchant, Payment Depot, Square, and Stripe. You may want to mention that none of these competitors have unnecessary fees.
That said, there are some aspects of processing that increase costs and constitute reasonable extra fees:
- Chargeback dispute fee
- Fees for add-on features
Chargebacks are a natural part of processing credit card transactions. You can do things to avoid them, but it’s extremely unlikely that any business can avoid them entirely. When they happen, they affect both you and the processing company. That’s why processing companies may charge a fee for chargebacks.
Chargeback fees range from $15–$50, depending on the circumstances of the chargeback. Some companies will waive the fee for chargebacks that are successfully disputed. If your contract has a fee for chargebacks that is considerably larger than the range listed above, you may want to negotiate that fee down a bit.
In fact, you could leverage Stripe’s chargeback policy in your sales call. Stripe charges only $15 when a payment is disputed, and that fee is refunded if the dispute is resolved in your favor.
The only other fees you may encounter are fees for extra services. Some processing companies will offer services like inventory management, rewards programs, and chargeback protection. Sometimes these services are included in the monthly fee and processing fees, but sometimes you’ll have to pay extra for them.