Clueless About Your Credit Card Processing Fees? You’re Not Alone (Almost 50% of Small Businesses Are)

Small business transactions have changed drastically as our economy adjusts to 21st-century realities. While business payments were formerly received through cash and checks, recent history has shown a clear transition to plastic and digital payments. What was once a luxury for the wealthy is now commonplace among many small business customers.

Credit cards are everywhere. Consumers use them multiple times a day for purchases as variable as picking up a snack at the convenience store, buying tools and parts for home and car repairs, and paying for rent and urgent medical bills. Because most consumers prefer the convenience of credit and debit payments, businesses are put in the position of accommodating these preferences in order to maintain their revenue stream.

Unfortunately, most small businesses start accepting credit card payments without thinking about the processing fees associated with these transactions. When businesses don’t pay attention to processing fees, they end up in a mess of financial complexity that costs them time, money, and customers. Switching your business over to a complete payment platform allows you to avoid the disastrous results of being ignorant about or simply overwhelmed by credit card processing fees.

Weave Payments provides small businesses with payment processing that simplifies credit card transactions. Before looking at the benefits of this easy-to-use service, let’s learn a bit about the various types of credit card processing fees and how they wind up costing small businesses time, money, and customers.

Credit Card Processing Fees

Many businesses become merchants without considering the numerous fees involved with charging credit cards. Everyone that participates in a credit transaction pays for the cost of the hardware, software, and networks required to process the transaction. However, those downstream of the credit card companies and banks, including the merchant, pay for the lion’s share of the transaction.

There are more than a few types of fees that your business might encounter when processing credit cards. These fees can be classified as transactional, scheduled, and incidental fees.

Transactional

Transactional fees come in two different forms: percentages and per-item dollar amounts. Percentages depend on the price of a purchase, while per-item charges are fixed, regardless of price. Both forms are often charged on a given transaction. Interchange fees are charged by card-issuing banks for each transaction, unlike assessment fees, which are charged by card associations. If your business uses a processor, there’s an additional markup fee that’s often baked into the wholesale interchange rate.

Scheduled

Businesses deal with dozens of different scheduled fees, many of which are forgotten or ignored in the day-to-day grind of managing an organization. Wholesale scheduled fees include fixed acquirer network fees (once per quarter), merchant location fees, and PIN debit network fees. Markup scheduled fees include annual and monthly fees, statement fees, online reporting fees, terminal fees, point-of-sale fees, PCI compliance fees, and IRS reporting fees. Though these scheduled fees often show up on monthly statements, they frequently go unnoticed and can add up when a business is accepting different card brands and types, as well as modern mobile and browser wallets.

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Incidental

Depending on the type of transaction being processed, there are also incidental fees that businesses are required to pay. Wholesale incidental fees include processing integrity fees, which are charged as a penalty when you have not met the requirements for authorizing or settling transactions properly.

Markup incidental fees, much like scheduled fees, are quite varied and include application fees, early termination fees, account closure fees, address verification fees, retrieval requests fees, chargeback fees, batch fees, NSF (non-sufficient fund) fees, and PCI non-compliance fees.

Keeping track of processing fees is almost impossible without an on-site accountant or finance expert that’s vigilant about checking monthly statements and monitoring for excess or unnecessary charges. Most small businesses can’t watch for every solitary credit card processing fee due to their limited staffing. Without keeping a careful eye on these fees, businesses incur losses on multiple fronts.

The Costs of Processing Fees

It’s clear that credit card companies and banks find myriad ways to take advantage of their upstream position by charging businesses for all kinds of reasons. Even when small businesses try to meet the challenges of processing fees head-on, they cost themselves time, money, and customers by trying to deal with this disjointed, confusing, and complicated process without the help of a third party.

Here are some of the ways businesses waste resources in the struggle to reduce or avoid processing fees:

Wasted Time

By asking administrative staff to spend time scrutinizing monthly statements, small business owners are sacrificing time that could be spent focusing on other, more pressing needs. Secretaries and business owners can get involved in drawn-out phone conversations with banks and credit card companies instead of providing direct service to clients.

If there were more specialized accounting positions in small businesses such as doctor offices and auto shops, this type of scrutiny would be more effective. Unfortunately, most small businesses can’t afford this level of attention.

Wasted Money

Some small businesses realize that their administrative staff isn’t capable of paying attention to the nitty-gritty details of credit card processing fees, so they find a third party to handle these complexities. This decision allows businesses to catch excess fees but costs them more than their fair share to hire accountants.
Instead of funneling profits toward other types of development, businesses waste money on reducing fees. Service stagnates in these situations, making customers reconsider their allegiance to a business that once had their loyalty.

Neglected Customers

Businesses don’t only lose time and money trying to catch unnecessary credit card processing fees; they also lose customers. When businesses devote administrative focus to accountancy or decide to hire out financial help, they miss out on the opportunity to recruit, maintain, and gain customers.

Customers want to keep payment processes as simple as possible. Sometimes small businesses forget this fact. They spend their time and money on tinkering with complex payment processes, and as a result lose touch with their foundation: the customers themselves.

Small businesses find themselves caught in a difficult position. They recognize the complex nature of credit card processing fees and how it impacts their profit margins. If they put too many resources into cutting these fees down to size, they sometimes lose touch with the client relationships they’ve spent years developing.

Luckily, there is a solution to this dilemma. Small businesses can simplify payment processing and refocus their efforts on providing the best service possible to their clientele base.

The Benefits of Weave Payments

In order to help small businesses deal with payment processing, our team has developed Weave Payments, a complete payment platform that revolutionizes the way your business handles credit cards, debit cards, HSA/FSA, and mobile payments. This platform is designed to help your small business save time and money, and, as a result, allows you to dedicate more time to your customers.

Save Time

Because Weave Payments is such an easy-to-use platform, it cuts down on the time your administrative staff is spending on collecting payments. Same-day collection allows your business to avoid traditional invoicing, which often takes up to 30 days. If your admin team runs into problems with the platform, our live customer service team is available to troubleshoot whatever issues you might encounter.

Save Money

Weave Payments is powered by Stripe, one of the largest and most secure payment companies in the industry. On average, businesses using Stripe attribute a 6.7% increase in revenue to the Stripe platform. By relying on Stripe’s platform, you no longer have to worry about the various processing fees associated with card brands, card types, and mobile/browser wallets.
It’s also important to note that Weave Payments eliminates upfront, monthly, and early termination processing fees. Our platform handles all payment processing and merchant services, saving you the usual headaches and additional accountancy fees.

Save Customers

The Weave Payments platform supports HIPAA-compliant communications and protects the information of both you and your clients. It also provides your customers with payment flexibility. If they don’t have time or ability to pay in the office, they can quickly be sent a text message so they can pay from their device.

Your administrative staff has the ability to customize invoice and payment pages to appeal to the specific tastes of your customers. These customizable features increase the likelihood of clients paying on time, thereby boosting the amount and consistency of revenue your business generates on a regular basis.

Surcharging Made Simple

For businesses that choose to offset rising processing costs, Weave Payments includes a built-in, fully compliant surcharging feature that makes cost recovery effortless. Instead of manually calculating fees or navigating complex legal requirements, Weave automatically applies the correct surcharge to eligible credit card transactions while ensuring customers are clearly informed upfront. This helps your business protect margins without raising prices across the board, encourages the use of lower-cost payment methods, and maintains transparency and trust with clients. With Weave, you gain the flexibility to manage processing costs in a way that aligns with your financial strategy and customer experience goals.

Find Out More About Weave Payments

Credit card processing fees are an exasperating aspect of running a small business. Managing these fees costs businesses significant quantities of time and money, and this waste frequently causes them to forget about the immediate needs of their customers. By switching to a complete payment platform like Weave Payments, businesses save time, money, and, most importantly, customers.

Contact our team for a free demo to learn more about what Weave Payments can do to revolutionize your small business.

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more about
Weave?
1 System for Phones, Texting, Payments, & More
 Access a full suite of patient communication tools with Weave! Texting, payments, reviews, & scheduling in one place. Get started today!
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