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6 Strategies to Help Eliminate Merchant Fees

For many entrepreneurs, merchant fees are a necessary cost of doing business. However, these fees can add up and cut into your bottom line. High-risk companies, in particular, tend to experience higher merchant fees due to the nature of their venture. Fortunately, there are ways to reduce and even eliminate merchant fees.

In this blog from ModPay Solutions, our leading 0% credit card processing providers will explore the different types of merchant fees. We’ll also provide strategies for helping eliminate merchant fees to create greater opportunities for your business to profit.

6 Strategies to Help Eliminate Merchant Fees

Table of Contents:

  1. First Things First: Let’s Talk About Merchant Fees

  2. Interchange Fees

  3. Payment Processor Fees

  4. Assessment Fees

  5. 6 Ways to Help Eliminate Merchant Fees

  6. Negotiate With Your Processor

  7. Reduce Your Risk of Credit Card Fraud

  8. Use an Address Verification Service

  9. Offer an ACH Payments Option

  10. Become Compliant with PCI

  11. Switch Payment Processors If Necessary

  12. Conclusion

People Also Ask:

How can a business avoid credit card processing fees?

  1. Protect your POS (point of sale) devices

  2. Remain PCI compliant

  3. Find the right merchant processor for your business

  4. Consider a zero-cost payment processing option

Why are card processing fees so high?

Banks regularly compete to attract businesses by offering various rewards and incentives. These offerings lead to higher interchange fees to cover the costs of these rewards. Credit card networks also attract banks to issue cards by offering high interchange costs.

First Things First: Let’s Talk About Merchant Fees

Understanding the merchant fees you’ll encounter as a business owner is essential. There are three main types of merchant fees: interchange, payment processor, and assessment fees.

Credit card processing fees, or merchant fees, are the costs your business pays every time you accept a credit card payment. There are various fees with every transaction, and they vary depending on the type of credit card you accept.

Continue reading to learn more about the merchant fees associated with credit card processing.

Interchange Fees

Interchange fees are payments made directly to the bank or other financial institution issuing credit cards to cover each swiped transaction.

Interchange fees can vary depending on the:

  • Type of credit card used

  • Amount of each transaction

  • Industry of the business

For example, because fraud is more common with online purchases, credit card companies may charge higher fees for these transactions.

Payment Processor Fees

The payment processor, also known as the merchant services provider, can charge fees to encourage card transactions. Traditional merchant provider fees often include per-transaction, equipment, monthly, and statement fees.

With conventional payment providers, these fees are how they make money since the processor does not get any profits from interchange fees.

Assessment Fees

Assessment fees are the costs paid directly to credit card networks. These fees allow the merchant to accept certain credit cards from customers.

Assessment fees are not based on per-transaction but on monthly sales. When assessment fees are combined with interchange fees, merchants refer to this total as a “swipe fee.”

6 Ways to Help Eliminate Merchant Fees

With the first month of the year nearing its end, now is the time to find the right, long-term solutions to eliminating costs for your business. A good place to start is by evaluating your credit card processing structure and all associated fees.

Our team at ModPay Solutions has put together six tips designed to help your business eliminate merchant fees when accepting credit cards:

Negotiate With Your Processor

It's okay to ask for a discount regarding merchant fees, especially if you've been working with the same payment processor for a while. Working with a merchant services provider should feel like a partnership, and yours may be willing to give you a better rate.

Research what other processors offer, like 0% merchant accounts. Being informed before entering negotiations with your processor will only help you make more informed decisions about your credit card processing solutions.

Reduce Your Risk of Credit Card Fraud

Generally, the higher your risk for fraud as a business, the higher your processing fees will be. This is often the cause of high-risk businesses operating in industries where the risk of chargebacks and fraud is more common.

Fortunately, most businesses have two main ways to help reduce credit card fraud and other security risks:

  • Swiping customer credit cards over keying in the card numbers

  • Cataloging security information

When you swipe customer credit cards as often as possible, you help reduce the risk of fraud for your business. This is because the rates set by brands like Mastercard and Visa go higher when you manually key in credit card numbers.

Merchants (businesses) can also lower their fraud risk by providing security data that protects the cardholder while validating the purchase. At ModPay Solutions, we recommend entering the security code and ZIP code of the cardholder whenever possible.

Use an Address Verification Service

It never hurts to take things further when reducing credit card fraud for your business. One way to do this is to use an address verification service or AVS.

AVS are systems that verify the cardholder's billing address with the card issuer. Address verification services are powerful fraud-fighting tools that provide notable benefits, especially in the e-commerce world.

Offer an ACH Payments Option

If you're a business owner, consider offering ACH payments for your customers. ACH payments are a type of electronic bank-to-bank transaction.

These payments are generally more reliable and faster than checks. They also do not have associated interchange fees like credit and debit cards, making ACH payments much more cost-effective for your business to accept.

Become Compliant with PCI

The PCI or Payment Card Industry Data Security Standard is a set of regulations created to protect sensitive credit card information. Most merchant providers allow businesses a certain amount of time to become PCI compliant.

Being PCI compliant helps reduce your risk of cyber threats and helps you avoid extra fees with compromised credit card data.

Switch Payment Processors If Necessary

The right payment processor can make all the difference in eliminating merchant fees. Switching to a provider with zero fee processing can make paying 0% on transactions possible.

It's also important to consider customer service when selecting a payment processor. If something goes wrong during a transaction, having access to merchant services experts can help save you time and profits in the long run.


Eliminating merchant fees requires taking a good look at your current setup and determining whether a zero-fee processing solution works best for your business.

Implementing these tips can help ensure your business remains profitable while keeping merchant fee costs low to non-existent!

Would you like to know more about eliminating merchant fees for your business?

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