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Credit card processing is essential for modern businesses, as the majority of consumers now use credit cards or debit cards for many types of purchases. To take bank cards, a business needs to establish a merchant account with a credit card processing company and pay regular bank card processing rates on each transaction. These rates can vary greatly from one company to the next and in order to get the best possible rates, it’s helpful to know why costs can be so different.

Bank card processing rates vary because processing companies take on different costs. Large businesses that submit dozens of transactions per day represent a smaller cost per transaction, so they’re often able to get better credit card processing rates. Most processors allow their merchants to estimate the number of monthly sales that they’ll submit each month when setting up services, although some processors also have trial periods that are used to gauge the average number and size of a merchant’s weekly transactions. In any case, rates can change if a merchant starts processing more or fewer sales on a regular basis. Some credit card processing companies even penalize companies that don’t make their expected numbers with small fees.

Credit card processing companies are aware of the fact that merchants consider bank card processing rates to be an important figure. Some processing companies will charge low initial rates, but merchants should be careful to read the entire fees schedule before entering an agreement, as these processors might also charge high gateway fees and other monthly costs to make up for their low processing rates. Processing companies might also charge different rates for different types of transactions. For instance, Internet transactions might carry lower bank card processing rates than in-person transactions. Rates can also vary by credit card issuer, as companies like MasterCard and VISA often charge differently. However, major credit card issuers are usually very competitive and the differences among their processing rates tend to be minor.

To get the best possible rates, merchants should compare fee schedules and discuss the amount of business that they’ll be handling on a weekly or monthly basis with several credit card processing companies. Some processing companies are better suited to a particular type of business, but the more transactions that a merchant handles on a regular basis, the higher the chances of locking in an affordable rate. Credit card processing is a critical part of business. A high or low processing rate can certainly make a big difference in a company’s profits and by evaluating options before entering an agreement, businesses can keep their rates at an agreeable level.