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How your small business can save on payment processing fees

 As a small business owner, you know that every dollar counts. Payment processing and credit card processing fees might not always be the first thing on your mind, but they do impact your overall business operations. 

Thankfully, there are a few things business owners can do to mitigate the cost of pricey processing fees, especially from credit cards. In this article, we break down what small business owners can do to avoid some of these costs altogether.

What is a payment processing fee?

Payment processing fees are the costs that business owners incur when collecting payments from customers. The fee is a pre-set amount that a business must pay when clients use debit and credit cards for their goods or services. 

Processing fees can be divided into two main categories: 

  • Interchange fee
  • Assessment fee

The interchange fee goes to the credit card issuer while the assessment fee goes to the network. So, if a customer uses a bank Visa credit card, the interchange fee goes to the bank and the assessment fee goes to Visa (also known as the network). Learn more about merchant credit fees here.

How many types of payment processing fees are there?

So, now that we’ve defined processing fees, let’s break it down even further. Processing fees can be divided into the following:

Transaction fees

As the name suggests, transaction fees are a charge businesses pay every time they process a customer’s payment. The cost of the transaction depends on the service used. 

Incidental fees 

These types of fees occur when scenarios like non-sufficient funds or transaction chargebacks occur and are only charged per occurrence. These fees can be charged depending on the situation if you’re below your monthly payments or have a defective customer transaction.

Flat fee

A flat fee is a fixed amount business owners pay to a payment solutions provider. This usually occurs every month. The flat-rate fee covers all processing aspects (except the in-charge fee). 

How to choose an online payment tool for your business

Because there are so many different online payment tools and platforms available for small businesses, it can be difficult to know which one is best for you. However, there are a few key features to look out for. Below is a list of tips to help you decide which payment tool is best for your business:


When it comes to choosing the best online payment method for your small business, security should be one of your top priorities. Before committing to a payment tool, ensure it has robust security measures and fraud protection solutions. This can include PCI compliance, encryption, and data tokenization. This helps protect your customers’ sensitive payment information.

Payment methods

Not all online payment tools are created equal. So, when choosing your payment option, make sure it supports relevant card types to your customers such as credit cards and debit cards. Make your checkout experience seamless and pleasant for clients by picking an appropriate payment tool. 

Customer support

It’s important to choose an online payment solution from a company that will give you support when you need it – whether it’s through online articles, live chat with customer representatives, or client support phone calls. Make sure to check out customer service reviews online to see what other business owners are saying.


Lastly, it’s important to understand the fees involved with each online payment too. Depending on the service, some systems charge monthly payments while others are transaction or percentage-based. Do your due diligence, compare the costs of online and in-person transactions, and find a payment system that fits your business’s needs and budget. 

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How small businesses can save on payment processing fees

Processing fees are probably not the first thing most business owners think of when starting a business – but, they shouldn’t be ignored. For all businesses that process credit cards and other online payments, processing fees simply come with the territory of owning a business. Here are a few things you can do to save on processing fees:

Set a minimum for customers who use credit

For high sales volume, low dollar amount businesses (like coffee shops and boutique-type shops), small purchases can be like giving away your goods or services for free. This is where many businesses struggle, which is why it’s important to set minimum amounts for customers who use credit cards. 

For instances like this, it can feel like walking a fine line. A lot of people today don’t carry cash. So, on the one hand, you don’t want to put a barrier between your customers and your products, but you don’t want to pay $0.30 in processing fees on a $3 cup of coffee. When deciding on your minimums, consider how many customers use cash versus card and plan accordingly.

Research before committing to an online payment tool

Before you pick an online payment method, make sure it’s the right fit for you and your business. Whether your priority is security, fees, internal capabilities or customer support options, ensure it reflects your business goals and values.

Buy your own debit and credit terminal

Depending on their business model and budget, some businesses may buy their debit and credit terminals. The hardware can vary in price (usually around $200-$1,000), but it’s contingent on its features. 

At the bare minimum, you’ll get a magnetic strip, display screen, chip card options, and a keypad. If you’re only looking to provide, then you shouldn't spend more than a couple hundred dollars. 

Streamline your business’s payments and processing fees by using QuickBooks. And with QuickBooks Payments, there are more ways to get paid by giving your customers flexible payment options. See your hard work pay off and the millions of small business owners who have taken control of their finances while saving money!

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