Posted On: July 25, 2021

How to lower credit card processing fees in 2021 ?

All business owners or managers look for ways to reduce the cost of processing credit cards. In today’s climate every penny counts to the bottom line. More than ever small businesses are cutting back on expenses. Lets take a look at what pricing programs are available and the pros and cons of each. We are going to give you two steps to finding the best pricing program and reduce your cost of processing fees in 2021

The first step in reducing your cost as a business owner is to find a reliable processor and an agent you can communicate with. The representation of a processor is crucial in ensuring you have a voice at your processor. 

The second step is to 

know what pricing options are available you. There are many ways to setup a merchant accounts pricing structure. Here are the 3 most preferred ways.

Traditional Pricing


Pass through interchange plus is the most cost effective if you the merchant and absorbing the processing fees. In this pricing scenario you, the business pays the interchange cost plus a markup. This is normally displayed transparently on the monthly statement. This is great for merchants with high monthly sales.  The benefit to getting interchange cost is that you get the benefit of the low-cost interchange rates such as signature debit and EMV chip transactions. 


The only con to this pricing program is estimating your monthly costs and reading the merchant statement. These statements show the interchange qualifications and the mark up. Some business owners find reconciling to be a challenge.

Flat Rate


This pricing program became popular with companies like square. They give you a flat rate for swiping a card and a flat rate for keying cards in. This program is easy to navigate your costs. 

Cons- Although knowing you have two rates helps estimate the cost of your monthly processing it does cost you the business more. Your lowest rate charged is the swiped rate generally at 2.75% or more. That means the least you will be billed is this. On interchange plus program you get the benefit of cards like signature debit cards that qualify at .05% which can be a huge savings. 

Cash Discount- This is the most cost effective for the business. This is where the business passes the processing fees to their customers the cardholder. They price all goods and services at a discounted cash price. They post notifications within their establishment and by the cash register that states that all goods and services are priced at a cash price. If they chose to use a credit card than a service fee is applied. Generally the only fee the business pays on this program is a monthly fee.  This can bring savings of over 95% to the business.  It is a huge savings.


This program saves most businesses at least 95% of processing fees. The only fee normally paid is a monthly fee which covers any technology and statement fees.  Most consumers are accustomed to paying a fee when they pay their utilities, taxes, booking concert tickets and now retailers. This program is most successful when the business posts a notification 30 days prior to implementing it. This gives customers notice to bring cash if they do not want to pay the fee.


The only con is how customers receive the program. Most businesses worry about upsetting their customers by passing this fee along.  The truth is most customers are open to helping small businesses stay in business. The program is successful when a 30-day notice is given to the customers and signage is present in the establishment. We found that only 3% of businesses who try this program switch back to the traditional program. 97% of businesses find this to be a game changer. They use the money saved from processing for employees, new equipment, and more products. 

All businesses have their own set of needs for technology and pricing be sure to find a processor you can work with transparently. Having great representation in your sales agent is key to fostering a good relationship with your processor. What ever program mentioned above works for your business make sure your processor has these options and is willing to give you the program you want.