Almost all of the people in the world have used or owned a credit card in our life. When you are handling business there are several things that one needs to think over that can benefit the industry?The important one is to decrease the budget and save money. One of the things that you can think of is lower Credit Card Processing Fee.
The procedure of using a Credit Card:
Have you ever considered how the whole process of credit card works? It is a simple and smooth process that involves only a few steps.
- First, you have to make a purchase either by online transaction or going to a shop.
- If you shopped at a department store then you need to swap the card. The retailer will either give you a transaction slip to sign or you have to enter the PIN code.
- For online shopping, the customer needs to enter the credit card number, expiry date and the 4 digit code at the back of the card to pay for the purchase.
- The information will go to the credit card issuer for verification after that an SMS will be received by the user.
- The merchant will finally receive confirmation that the payment has been received.
Parties involved in the Process:
The process of a credit card transaction is incomplete if any one of the following individuals is absent during the whole process. It is vital that each work with the other for running of a smooth transaction.
The issuer of the Card:
This is the bank that works with the credit card network to issue a card to the users. The fee of the card is charged by the bank. The issuer and network work together to provide the card so that transactions can proceed.
The customer doesn’t acquire the card straight away from the network. The most popular networks are Visa and MasterCard which provide the bank with different offers.
The businesses that accept the credit card are the merchants; they can be either an individual vendor or a company that is advertising the product online or at retail stores.
The middleman is a third party that provides a bridge of payment amongst the merchant, issuer and the consumer. These are the different payment apps that are available on mobiles and other electronic devices.
When a customer makes an order then presses the “Submit Order”, then the payment is diverted to a channel that allows payment transactions between portals and various another e-payment gateway.
Different Kinds of Credit Card Fees:
Have you ever thought of the long list of transactions that come in each credit card bill? A lot of entries are the transactions of a credit card but the rest are the different fees that the credit card issuer has imposed on.Orumfy is one of many online websites that help customers with credit card fees.
Whenever you make an e-transaction via your credit card, the fee is charged. The typical rate of fee is from 0.5% to 5% but the rate can vary from credit card network and the card issuer.
This isa gateway fee which is taken monthly for using the credit card. These fees can also be taken on a yearly basis.
Incidental fees are charged in case the credit card holder doesn’t pay the required amount within the given time frame. These fees may not be charged in months but when they do it is a lot.
Tricks to Scale down the Credit Card Processing Fees:
The question here arises is how to reduce the Credit Card Processing Fees? Businessmen can use the following tactics to decrease the rate of these fees.
Negotiating the Fees:
The fees of many banks are negotiable and can be cut down if the customer demands. If you are making lots of transactions on a regular basis then the processor can reduce the rate of fees to accommodate your expenses.
Be Honest and avoid Fraud:
Keep a very good track of your credit score by making payment schedules clear of any fraud. If you do this then after some time the bank and credit card processor will eliminate any access fee on you.
Use PIN code:
Whenever you purchase any item try to use the PIN code to confirm the transaction. This will scale down any extra fee that is been charged.
Set up a Proper Account:
There are many people who don’t provide the right information when they open up an account. You must choose the correct gateway for payment which is not into any kind of fraud.
Consult an Expert:
Before applying to the any credit card you must take advice from someone who is an expert in all the rules and regulations concerning Credit Card Processing Fees. He can be a corporate lawyer or a person who has the detailed knowledge of the terms and conditions.
Eliminate Unwanted Transactions:
If your credit card issuer is imposing some unwanted fees for transactions that you don’t want then it is in your best interest not to agree with it. It will save you money to invest in the growth of your industry.
Now you know that what types of Credit Card Processing Fees are there and how you can reduce some of the unwanted ones to increase the profit and use it somewhere else.