Lowest Credit Card Processing Costs

November 21, 2016

November 21, 2016

[wpseo_breadcrumb]

Categories

Lots of business owners ask us “how much does it actually cost to process a transaction?”. Sometimes they are just curious, and sometimes they want to know for purposes of evaluating what is a good deal. While none of the big credit card processing companies will ever come out and tell the world their cost structure (since […]

46 Seconds to Discover Thousands of Wasted Dollars in your Business.

82% of companies find $12,000 wasted annually. How much are you losing?

nexus-feefighters-quiz-saving-money

Lots of business owners ask us “how much does it actually cost to process a transaction?”. Sometimes they are just curious, and sometimes they want to know for purposes of evaluating what is a good deal. While none of the big credit card processing companies will ever come out and tell the world their cost structure (since that’s a competitive secret), we have a few bits of data that we can piece together for an answer.

 

First, on the FeeFighters marketplace, the processors markup, over the wholesale cost that they must pass on to Visa and Mastercard, called Interchange, is usually between 0.10% and 0.30% of the volume of the transaction plus between 0.05 and 0.20 per transaction. So, on a $50 average purchase, these processors are offering a cost of about 0.10 and 0.35 per transaction. We know they are NOT making those bids at a price that loses them money.

 

Second, First Annapolis Consulting, a firm that specializes in studying credit card processing, crawled through the publicly available financial statements of a few processors and came up with a different answer in their September 2007 issue (free account required to read).

 

They found that it costs between $0.07 and $0.61 per transaction.However, that analysis INCLUDES sales costs, including the profit that their reseller partners make. So it’s not really the cost of just sending the transaction over the wire and then billing you for it, but it does put us in the ballpark. Ignoring iPayment, which is kind of an anomaly, we can conclude that processing a payment costs no more than $0.07 to $0.30 each.

 

Why is Chase Paymentech so much cheaper than their competitors?

  1. First, it’s bigger, and we know that processing transactions is more cost effective at higher volumes.
  2. Second, it has more large customers, and for large customers sales costs are lower on a per-transaction basis.

Reduce Credit Card Processing Fees

with FeeFighters

[comments-template]

Recent Posts

In today’s business world, the point of sale (POS) system has become a key part of operations for retailers. The POS system is involved in several aspects of a business, such as inventory management, funds, and managing the inflow and outflow of products and services within a store. Due to its unique position in key […]

What Is Sales Tax Compliance Outsourcing? (SALT)Ever since the South Dakota v. Wayfair court ruling that you don’t need to have a presence in a state in order to be required to collect taxes on sales there, tax law has never quite been the same. If you need to collect taxes in many states and […]

Knowing how to properly collect sales taxes in different states and jurisdictions is incredibly complicated. Different tax jurisdictions have different laws and rates, but accountants and tax lawyers are expensive. Worse yet, a tax mistake due to ignorance of sales tax law can lead to an audit or penalty that will cost your business a […]

Chargebacks are debit or credit card charges that have been disputed by customers. Sometimes these come in the form of chargeback fraud, but other times they are legitimate. When a chargeback happens, you have to deal with the acquiring bank and other entities in order to dispute it. Regardless of the reason for any given […]

© 2019 – FeeFighters, LLC – Call Us – (646) 448-8804

PO BOX 1459, MOUNTAINSIDE, NJ 07092

×