As a business owner, you want to manage expenses as best as you can to drive more revenue to your bottom line. In card processing, there are a few things you can do to help you control card processing cost.

1. Insert/Dip/Tap the card if you have a device and the opportunity. Not only are they the lowest cost, they are among the most secure forms of payment. Mobile wallets are low cost, low risk, and a fast, secure transaction. A card swipe is secure and low cost, but does have greater chargeback risk than an insert/dip or tap payment.

2. Batch or settle your funds within 24 hours of authorization. Banks require settlement within 24-hours to secure a low rate. Going over 24 hours will increase the interchange cost of accepting the card.

3. Avoid hand-keying the transaction if you can, but if you cannot, please key in the billing address (numeric), zip code, and CVV2 on the back of the card. If you are working with a commercial card or purchase card, you may be required to enter additional data fields on a virtual terminal.

When it comes to accepting cards, the debit card is the least expensive card to transact for payments over $15.00. The signature card, rewards cards, world t&e and other point, perks or cash back cards will carry higher costs.

We hope you enjoyed these tips and look forward to sharing more information with you again soon. Should you have any questions about payments for your franchise business, we invite you to contact us.

The FPN client support team routinely receives calls about the fees associated with accepting credit cards and asks what can be done to keep the cost to a minimum. Here is a simple explanation about the fees you pay and how to minimize your cost.

There are three components that make up your cost: Interchange, Assessments and Processor Cost.

Interchange is the fee you will pay for an authorization and settlement of a transaction (moving money from the cardholder to your bank account). Interchange is the most costly fee associated with credit card acceptance. This portion of the fee goes directly back to the bank that issued the card and will vary based on card type (debit, credit, rewards, signature, commercial, business, world t&e, etc.).

Assessments is the fee paid to the card brands, Visa, MasterCard, Discover, American Express. The money collected from the fee goes directly to the card brand. Did you ever wonder how they sponsor so many sporting events?

The Processor Cost is the final component. This fee is approximately 15-18% of your card cost. The fee covers the cost of support, risk, and underwriting the merchant account.

Your franchise has negotiated the one component they could in the process to help provide you with the most effective program available.

In the next article you will have a chance to learn about how to keep your card costs to a minimum.