What on earth am I paying for with my payment fees?
Weehooo with a spicy title like that, let’s dig into this - transparency is important and we get it, payment fees are complex beasts to understand!
But first, a disclaimer: Everyone’s payment fees are different and may be comprised of different things, or have slightly different definitions or inclusions. It’s best to check directly with your payment provider before making any decisions based on this article.
Now that that’s out of the way, let’s break it down. Your payment fees are typically made up of two components (and again, we are generalising):
A percentage based fee: Typically somewhere between 1% - 2% of the transaction value
A dollar based fee: Typically in the cents, and usually between $0.20 - $0.30 per transaction
The percentage based fee is usually comprised of three parts:
The scheme fees: These are fees charged by the card networks (i.e. Visa, Mastercard) for using their rails
The interchange fees: These are the fees charged by the banks for providing the facility to your customers
The merchant service fee: This is the fee that goes to the payment processor to move the money
The dollar based fee is normally charged per transaction and is more common for online transactions than in-person transactions.
How can I reduce my payment fees?
We get that for merchants, especially as you grow, these fees can really start to add up. There’s a few ways you can bring these fees down:
Review your pricing model
There are a number of different ways that these payment fees can be priced. You can find more information about two of the most common ones, Blended and Interchange Plus Plus in our blog here. If you’re currently priced blended it may be worth exploring whether an Interchange Plus Plus model may help you save on fees. We’re happy to walk you through the difference and provide a no-obligation consultation.
Review your provider
One of the best ways to save fees on anything is to change providers. At GreenPay, we have a commitment that we will match or beat your current fees wherever possible to ensure that it’s a win for you and a win for nature, and if we can’t - we’ll tell you! Feel free to contact us for a free review of your pricing to see if we can find some savings.
Review your solution
Is the solution still the best one for you? Perhaps you have five terminals but you really only use three? Are you using a physical terminal for phone orders when you could be using a virtual terminal to send payment links and save the terminal cost? We like getting creative - we’re happy to review your setup and let you know where it can be improved.
We appreciate that payments can be a really confusing space to wrap your head around, so please do reach out - we’re happy to help demystify it for you, and check that you’re getting the best for your business.