If your pet business wants to accept credit cards, there is a lot you need to know to understand credit card processing fees. Fees can range from 2.87% to 4.35% per transaction and that doesn’t include the merchant fees. These fees can add up so it is important that you understand how it works.
Types of Credit Card Processing Fees
Interchange fees: This is the largest part of the processing fee. Often referred to as a swipe fee or discount rate, this is paid by your business directly to the credit card issuer (Visa, Mastercard, AMEX, Discover, Etc..) This fee is usually higher for online Card-Not-Present purchases versus Card-Present due to the increased risk for fraud. Interchange fees are different depending on the credit card that your customer is using to make the payment, how much the charge is for, and the type of business.
Average Credit card interchange fee ranges
- Mastercard: 1.45% to 2.90%
- Visa: 1.30% to 2.60%
- American Express: 1.80% to 3.25%
- Discover: 1.55% to 2.45%
Assessment fees: The assessment fee is a smaller fee that you would pay directly to the card network (Visa, MasterCard, Discover or American Express). Assessment fees depend on factors like total monthly sales volume, credit vs debit usage, foreign transaction fees etc..
Types of Payment Processor Pricing
In addition to the fees to the credit card companies, the payment processor also charges fees, usually using one of the following structures.
Flat-rate pricing
With Flat-rate pricing, the processor charges a flat fee for each transaction. This fee consists of the interchange fee, the card brand fee, and a transaction fee. The downside to flat-rate pricing is you may be paying higher rates on some cards and may not notice the benefit of less expensive interchange fees due to flat-rate pricing.
Tiered pricing
Tiered pricing has different processing fees for transactions in a low tier or high tier. You may be attracted to tiered pricing due to the low rates for the “low tier” but it is important to do your due diligence to see what percentage of your transactions are low-tier.
Interchange-plus pricing
For Interchange-plus, the processor uses the lowest applicable interchange fee and charges a fixed fee in addition. You would receive the lowest possible interchange fees, while always knowing what the fixed fee will be.
Examples:
Tiered 1.5% to 2.9% for card-present transactions, 3.5% for non-present transactions
Flat Rate 2.75% to 2.90% per transaction
Interchange Plus 2.2% + $0.22 per transaction
There is so much to learn about credit card processing fees, but there are ways to minimize your costs to find the most cost-effective solutions for your pet business. Avoiding flat-rate pricing is a good first step. While it may seem cheaper, it usually ends up being more expensive where interchange-plus pricing varies depending on many factors it can end up saving you money with lower rates.
When shopping around, read the fine print to avoid additional hidden fees. Get a quote for your business to see how PetBiz Payments is helping the pet industry save money on processing fees! Stop overpaying with Flat Rate providers.
Examples: Pet Businesses Monthly Savings
- Company 1: $130,000 a year in sales > Saving $100 a month • 10% less than previous processor
- Company 2: $700,000 a year in sales > Saving $150 a month • 10% less than previous processor
- Company 3: $650,000 a year in sales > Saving $120 a month • 10% less than previous processor
- Company 4: $600,000 a year in sales > Saving $50 a month • 5% less than previous processor
- Company 5: $400,000 a year in sales > Saving $15 a month • 5% less than previous processor
- Company 6: $275,000 a year in sales > Saving $75 a month • 10% less than previous processor
- Company 7: $100,000 a year in sales > Saving $85 a month • 20% less than previous processor
- Company 8: $250,000 a year in sales > Saving $115 a month • 16% less than previous processor
- Company 9: $80,000 a year in sales > Saving $90 a month • 15% less than previous processor
