As a small business owner, you accept credit cards because it’s convenient for customers and a smart business decision. You could be overpaying for that convenience, which puts your business’s financial security at risk. Every month, evaluate your credit card processing statements and take six steps to avoid overpayment.
For an outside review of fees and risks, consider scheduling a Payment Processing Risk Audit to identify errors or hidden charges.
How to avoid overpaying for credit card processing
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1. Check each statement carefully. It’s tempting to glance and pay, but review each statement line by line for data-entry mistakes, incorrect charges or mislabeled transactions. If you’re unsure what to look for, keep your merchant agreement handy or consult your accountant or CPA.
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2. Look for details. A statement that only lists total processed and total due is not detailed enough. You should see the number and volume of transactions and the specific tiered, interchange-plus or interchange-with-membership rate for each card type you accept.
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3. Note any lowered fees. If some fees decrease from one month to the next, the processor may have applied a debit rebate or made an adjustment to retain your business. Lowered fees can mask other hidden charges that outweigh the savings, so confirm the changes.
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4. Know the access fee. Visa and MasterCard charge an access fee per transaction, typically a few cents. Your processor can raise that fee by several cents without obvious notice, and on high transaction volumes a small increase can cost hundreds annually. Always verify the access fee on each statement.
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5. Watch monthly and annual fees. Processors add statement, PCI, regulatory and other fees each month. If these add up to more than about $300 per year, you may be paying too much for the service and should investigate alternatives.
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6. Evaluate your plan options. Your business may have outgrown the plan you chose when you signed the contract. Review your transaction history and sales volume to determine whether switching plans or providers would save money and better fit your needs.
Accepting credit cards is wise for many small businesses, but you must know how to read monthly statements to reduce the risk of overpayment. If you’re concerned about liability or coverage related to payment processing, review options like Merchant Processing Insurance. Contact the credit card processing company with questions or talk to an agent.
Frequently Asked Questions
How often should I review my credit card processing statement?
Review statements every month so you spot errors, fee changes or mislabeled transactions quickly.
What is an interchange fee?
Interchange fees are set by card networks (Visa, MasterCard) and vary by card type and transaction; processors usually pass these through with a markup.
Can my processor change fees without telling me?
Some fees can change with limited notice; that’s why it’s important to check each statement for unexpected increases.
Who can help me understand my merchant agreement?
Your accountant or CPA can review the agreement, or you can request clarification from the processor’s support team.