Credit card processing fees small business: Hello everyone! Today I’m answering a question that I completely ignore when it comes up in Facebook groups, business strategy forums, and everywhere else: “How do I avoid credit card fees?”
Let’s be clear: you should not try and do it! I know it’s frustrating. Credit card fees, which are typically around 3% of the transaction amount, can be daunting. For example, if your annual income is $100,000, you can pay $3,000 in commissions. But the point is that these costs relate to a service that adds significant value.
Imagine waiting weeks to receive a check or wire transfer in the mail for each payment. That’s why credit cards exist: so you can get your money quickly, safely, and directly into your bank account. It is a service and services deserve compensation.
Accept other payment methods
It doesn’t matter if some customers prefer to pay by check or bank transfer. Answer them if necessary, but be mindful of the impression you leave. Would you buy a product online if you were asked to send a receipt before receiving your order? maybe not. To maintain a professional image among your clients and receive payments quickly, it is important to make payments easy for them.
How to account for credit card fees
There’s only one right way to manage these costs: raise your prices. Think of fees as the cost of doing business, just like materials or rent. By adjusting your prices by 3%, you can ensure your profits stay the same without surprising your customers with additional costs.
Credit card surcharges may also be illegal in some regions. Be sure to check your local laws. While this is legal, you should consider how it will affect your brand image. If you charge extra later, customers will perceive you as unprepared or unprofessional.
Choosing a Credit Card Processor
Most credit card processors charge a similar fee (around 2.7-3%). Evaluate your options based on your business needs, such as:
- Transaction Vol. If you process a large number of small transactions, look for a processor with a flat fee.
- Integration: Choose a processor that works seamlessly with your tools like CRM or invoicing software.
- reputation Choose a trusted platform like Stripe, Square or PayPal Business instead of a personal payment method like Venmo.
Stay on board
Avoid questionable methods like PayPal’s “friends and family” option for business payments. This is against the terms of service, does not protect buyers/sellers, and can cause serious problems in the event of a dispute or audit.
If your business can’t handle a 3% commission, it’s time to rethink your marketing and pricing strategy. Be clear about your value and pricing so that a small fee doesn’t jeopardize your success.
Credit card fees are part of running a modern business. Accept them, take them into consideration and try to make the payment process as easy as possible for your customers. Trust me, it will pay off in the long run.
Thanks for reading! Share your thoughts in the comments below, See you next time!