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TIL my online payment processing fee went from 3.5% to 1.9% in 6 months
Back in February I was paying 3.5% on every credit card transaction through Square. I run a small pressure washing business in Tucson and it was eating like $200 a month in fees. I finally sat down and called three different payment processors to compare rates. One guy explained that once you hit $5,000 in monthly volume you can usually negotiate. I switched to a local processor called AZ Merchant Services and they locked me at 1.9% plus 10 cents per swipe. The difference over 6 months is roughly $480 saved. Has anyone else tried negotiating their rates or am I just lucky?
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uma30624d ago
I read a report from the National Federation of Independent Business saying small businesses lose an average of $1,200 a year to hidden processing fees before they even realize they're being overcharged. @james661 makes a good point about per swipe costs because I ran my own numbers and found that on a typical $45 pressure washing job the 10 cent fee is basically nothing compared to the rate drop. It really pays to break down your average sale size and total monthly volume before switching to make sure the savings are real.
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james6611mo ago
3.5% to 1.9% is a good drop but you gotta watch those per swipe fees. 10 cents a swipe adds up fast especially if you're doing a lot of small transactions. On a $10 sale that's basically another 1% right there. Plus local processors can be hit or miss with customer support when something goes wrong. I had a buddy who switched to a small guy and got stuck with hidden PCI compliance fees and monthly minimums that ate up all his savings. Not saying you got a bad deal but I'd run the numbers on your average ticket size to make sure 1.9% plus a dime is actually better than a flat 2.5% with no per swipe costs. Sometimes those big names are simpler for a reason.
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