Why Are Credit Debit Card Processing Fees So High?
The importance of credit cards for small businesses is huge. Today, almost three quarters of consumers carry at least one credit card. In this sense, for business owners, credit card is becoming more critical than cash. However, credit card processing fees are a problem for business owners. These fees may not appear much at first glance, but these small percentages for each transaction can be collected quickly. Combined with transaction fees, assessment fees, authorization costs, and other monthly fees, the amount of invoices the business owner pays each month can reach tremendous proportions.
How Much Are Credit Card Processing Fees?
So far we have talked about these fees. And in what range? On average, credit card processing fees range from 1.5% to 2.9% in the UK. Also, there is an average 3.5% higher credit card transaction fee for entered transactions to take into account the high risk. Especially for high-risk businesses, this ratio may reach scary levels. Credit debit card processing fees can shake your budget if you trade a lot, even if it appears to be small rates at first.
3 Parameters for Higher Credit Debit Card Processing Fees
- The processing method is important at this point. Card-gift (swiped or chip reader) transactions have lower risk for banks. Because the risk of fraud and / or chargeback is lower. Banks may charge you lower fees in these transactions. Because the risk is small. The risk of fraud is high in transactions carried out over the telephone or on the Internet without a card. Therefore, the fees in these transactions will be high.
- Transaction size is another factor: The lower your average transaction volume, the higher your transaction fees. For example, ￡100 5 transactions are much more expensive than five ￡100 transactions. However, if your transactions take place at high amounts, you may be comfortable with this.
- The type and manner of operation of your business is another important factor. For example, in the US, all businesses have a Standard Industrial Classification Code and a Commercial Category Code. There are similar regulations in the UK. These standard codes allow cardholders to know what kind of business the consumer is trying to do. Accordingly, businesses operating in risky areas are subject to higher credit card processing fees, often due to the risk they are exposed to. The type of work you do directly affects your credit debit card processing fees.
Fast and Easy Solution with GB Payments
Credit card processing fees do not negatively affect your business plans. The best solutions for your business meet you with GB Payments quality. GB Payments has a fast and easy on boarding process which offers you the best and quickest way to start accepting payments for your business. GB Payments can help your business’ credit debit card solution needs and offer you the best in house solution for your merchant credit card needs. – Call 0800 009 6169 or Write to sales@gbpayments.co.uk