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Small Business Credit Card ProcessingSmall business credit card processing does not always mean that just a few dollars are processed through your credit card machine. In some cases even a little shop may authorize millions of dollars annually if the store provides expensive services or sells a lot of high dollar, low volume items. Conversely, a convenience store may proces millions of dollars in small transactions, but be marginally profitable because it operates 24 hours a day.

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How To Get Big Business Discounts on Processing

If your small company is processing over $15,000 per month in credit card transactions, you should be able to get processing rates that are comparable to big box stores. Many companies were initially set up on "tiered" credit card processing rates that may make an average transaction cost 3.5% to process. Today, "interchange plus" pricing may bring that down to less than 2% for credit cards, and pennies for debit cards.

The average small company will just get a credit card terminal to accept cards, but even this is unnecessary if you take card numbers over the phone or online (like at a food delivery service.) If you take cards in person, swiping the card through the machine is far cheaper than a virtual terminal or payment gateway. Similarly, if you invest in a POS (point of sale) system, you may be able to process cards through the software or hardware on the device. Just be sure you keep the security features updated regularly to prevent any card theft.

The Durbin Amendment and recent lawsuit settlements mean that you may be able to change the way you process cards, and even (if legal in your state) impose a fee for credit card acceptance known as a "swipe fee." While many retailers won't do this to their customers, you may be able to recoup the cost of processing with impunity if you have a service that has little or no competition and is hard to replicate. Most small business owners choose not to hit customers with overt charges, but may instead just jack up all of their prices to account for the added cost of processing. This means that they realize additional profitability when people use cash or checks. In any case, traditional "mom and pop" shops can still see discounted credit card processing rates by gettin a merchant account comparison every time that their processing contract comes up. The savings could be significant, especially when business growth and new locations are considered over time.