Many business owners shy away from accepting credit card simply because they do not know the costs associated with accepting credit cards. This has a lot to do with the myths surrounding the use of credit card.
Unfortunately, a lot of ‘wrong information’ regarding the usage and acceptance of credit cards has been doing the rounds for years, and nobody has ever sit down to bust these myths. In a nutshell, accepting credit cards is not harmful for any kind of a business at all, be it a small business or a large business. On the contrary, it can turn out to be beneficial.
So, let’s talk about the costs that one should be aware of and how to figure everything out without messing your head. Figuring out the costs associated with accepting credit cards is not as difficult as many people make it look like. It is no rocket science.
The fees involved depends on a number of things. These include:
- Dollar Amount
These vary based on the nature of the transaction and the processor. It is very important for business owners, especially those running a small business, to be aware of these costs. Some shops, such as Mom-and-Pop stores have a minimum purchase amount for credit cards to be accepted as a mode of payment. Accepting a credit card may impact such business decisions, but in the long run it has proven to be beneficial.
Let’s go even deeper into this, and see more costs associated with accepting credit card payment:
- Gateway Fee: This fee varies and depends on a number of things as stated earlier
- Statement Fee: This can go as $5/ month, however the standard is $10/month
- Monthly Minimum: This amount again varies based on a number of things. However, one thing that is to be kept in mind is that businesses might have to pay a little extra if they fail to meet the minimum required limit
- Transaction Fee: The good thing amount this fee is that it is fixed for every transaction, not with understanding the size of transaction
- Address Verification Fee: This fee is charges on per transaction in order to verify the buyer’s address
Average Discount Rates: This is the percentage of the sales that is kept by the processor.