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Negotiating Interchange Fees: One Merchant's Story


We asked for tips last week on how your business deals with high interchange fees on accepting credit card payments. Opponents of laws to regulate interchange fees say, among other things, that merchants can already negotiate with their banks to lower the cost of accepting credit cards. A reader named Michelle said she did just that. But her story hardly makes it seem like a real option for most businesses:

I was able to negotiate a significantly lower rate on my interchange fees. It was painfully time consuming, and I was dealing with a customer service agent who was fairly green, but due to their own mistakes and lack of knowledge of the process, I was able to get several different fees waived, as well as lower rates for all three tiers of transaction types. Make sure you pay attention to knowing what types of cards you are swiping most of the time; debit? PIN debit? credit? rewards cards? all of these will have different rates. If you are swiping a PIN debit card will it be cheaper for you to run it without the PIN number? or with? Every contract is different, each provider will have their negotiated rate that they can work with or not… if you are a small business owner like me, you have to be informed because nobody else is going to do this work for you. on a final note, we sell both brick and mortar and online, you should be negotiating different rates for each of those accounts depending on the volume of transactions.

Thanks to all the readers like Michelle who left comments and advice for other business owners. One of the issues that came up a lot is how hard the statements and contracts are to decipher. I’d love to take a look at some examples. If you have a statement or contract that you can scan (either black out identifying info or only scan part of it) and send over, feel free to get in touch by email or Twitter.

For more reading on this, see also:

Merchants Seek Lower Credit Card Interchange Fees (BW)

A primer on interchange fees (Helcim’s Credit Card Processing Blog)

3 Myths About Credit Card Fees for Businesses (US News and World Report)


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