top of page
  • LinkedIn
  • Twitter
  • ModPay Solutions

Try These Tips to Eliminate Merchant Fees Before Switching Credit Card Processors

In today’s business world, credit card processing is vital to any business that wants to succeed. With the rise of e-commerce and increased credit card transactions, businesses must find ways to reduce costs to remain competitive.

As a business owner, you may want to switch to another credit card processor to do this. However, before doing that, there are some tips you can follow to reduce or even eliminate merchant fees altogether.

In this blog from ModPay Solutions, our experts will share some strategies you can implement to significantly cut costs on credit card processing before you decide to switch providers.

Try These Tips to Eliminate Merchant Fees Before Switching Credit Card Processors

In this blog from ModPay Solutions, our experts will share some strategies you can implement to significantly cut costs on credit card processing before you decide to switch providers.

Table of Contents:

  1. Understanding Merchant Fees

  2. The Different Types of Merchant Fees

  3. Tips to Eliminate Merchant Fees Before You Switch

  4. Negotiate with Your Current Processor

  5. Review Your Statements for Hidden Fees

  6. Implement Chargeback Reduction Strategies

  7. Implement Fraud Prevention Measures

  8. Encourage ACH Payments

  9. Switch to Another Merchant Processor

  10. Conclusion

Understanding Merchant Fees

Before diving into how to eliminate merchant fees, it's important to understand what they are and how they work. Credit card companies and merchant processors charge merchant fees for accepting credit card payments.

Merchant fee costs typically range from 1.5% to 3.5% of the transaction amount, which can add up quickly for businesses with high-volume sales. Some processors also charge monthly or annual fees.

The Different Types of Merchant Fees

Merchant account providers levy specific fees for opening and maintaining these accounts. These fees can be either monthly or annual, depending on the provider. Other fees, such as application, setup, and cancellation charges, may apply.

Transaction Fees - Transaction fees are charged to a merchant (business) for every credit card transaction processed. Transaction fees can vary between different credit card brands, such as Visa, MasterCard, Discover, and American Express. Merchants may also pay different transaction fees depending on their business’s size, volume, and sales model.

Card Association Fees - Credit card companies also charge merchants fees related to the use of their networks. These fees differ depending on the issuer, card type, and processing method. Card association fees are typically charged as a percentage of the transaction value or a flat amount per transaction. Visa, MasterCard, and other card issuers will also charge businesses additional fees if they store card data after a transaction occurs.

Chargeback Fees - A chargeback occurs when a customer disputes a charge and asks the card issuer to investigate the transaction. Chargebacks can occur for various reasons, but the most common ones are fraud, dissatisfaction, or dissatisfaction with the goods or services. Chargeback fees can be costly and vary significantly between merchant service providers.

Miscellaneous Fees - Miscellaneous fees include any other fees not covered by the above categories. For example, minimum transaction fees may be levied on businesses that do not meet the minimum transaction threshold. Also, gateway fees may be charged for using a secure interface that allows businesses to process online payments.

Tips to Eliminate Merchant Fees Before You Switch

Credit card processing costs can be overwhelming for businesses, especially small businesses. High processing fees can cut into profits, making it difficult to run a successful operation.

Before making the switch to another merchant processor, try implementing the following tips:

Negotiate with Your Current Processor

Want to stop paying so much in merchant fees? Try negotiating with your current processor first! Although many business owners overlook this, you can often negotiate your rates and fees with your current processor.

Approach your processor and have an open and frank discussion about your business's payment processing needs. It never hurts to ask if they are willing to reduce their fees.

If they value your business and want to keep you as a customer, they may be willing to offer you a lower rate. Use this opportunity to negotiate lower fees, eliminate hidden charges, or switch to a more cost-effective payment plan.

Review Your Statements for Hidden Fees

Regardless if you choose to stay with your current provider, or switch to another processor, always review your processing statements for hidden fees. The credit card processing fee percentage is only a small part of the real fees you pay.

Other charges can include non-compliance fees, monthly fees, and authorization fees. Unfortunately, these charges are often buried deep in your statement and hard to spot. Consult your processor to clarify these fees and identify ways to avoid them.

Implement Chargeback Reduction Strategies

Chargebacks are costly to businesses, resulting in fees, penalties, and lost revenue. They happen when a customer disputes a transaction with their bank.

Implementing chargeback reduction strategies can help you prevent these disputes and avoid the associated fees. Some ideas to consider include updating your return policy, prioritizing customer service, and monitoring transactions for fraudulent activity.

Implement Fraud Prevention Measures

Finally, implementing fraud prevention measures can help you avoid costly chargebacks and reduce processing costs. This can include using advanced fraud detection software, training your staff to identify potential fraud, and enforcing strict payment policies.

At ModPay Solutions, we recommend becoming PCI compliant if you haven’t already. Compliance with the Payment Card Industry Data Security Standard (PCI) means that your business follows the protocols outlined to protect and secure the credit card data of your customers.

By being proactive about fraud prevention, you can reduce the risk of fraudulent transactions while avoiding unnecessary processing fees.

Encourage ACH Payments

To encourage your customers to choose ACH payments, offer discounts or rewards to customers who use this payment method.

Switch to Another Merchant Processor

If you’ve talked to your current provider and are still unhappy with how much you’re paying, remember that you have options! There are merchant processors out there that can provide you with alternative solutions.

At ModPay Solutions, we’re in the business of helping businesses of all sizes and industries

eliminate merchant fees with 0% merchant accounts and zero cost credit card processing.

When transitioning to a new credit card processor, aim to do it with minimal disruption to your daily operations.

Be sure to communicate with your customers to advise them of the transition and walk them through the process so they know about the changes. Once you’ve finalized the new contract, finish your transition process with your provider, notify your customers of the change, and enjoy your newfound savings.


Eliminating merchant fees by switching to another credit card processor can be a great way to save money for your business. Analyzing your current contract and utilizing negotiation tactics can help to identify potentially hidden fees and secure better rates. If you want to save money on merchant fees, try implementing the tips above to help move towards a more profitable bottom line.

Would you like to know more about how to eliminate merchant fees?

13 views0 comments


bottom of page