Estimated read time: 4-5 minutes
Cash is no longer king, it seems—at least for the younger generations. More customers now prefer to pay with a credit card, which means that businesses large and small are now contending with a new profit-sucker: credit card processing fees. Every time a customer uses a credit card, businesses lose a percentage of that payment to a black hole known as the credit card processing fee.
Utah company Verisave is fighting back against these fees. Businesses can save money with Verisave and avoid the headache that comes with trying to decipher the credit card industry.
How credit card fees work
Companies that take credit cards as a form of payment are forced to pay fees every time they process a transaction. There are multiple types of fees involved in every transaction, which is why some small businesses are loath to accept credit cards—the fees eat into their slim profit margins.
Interchange fees are paid to the card issuer (the bank that issued the card to the cardholder) and is used in part to fund reward and incentive programs such as cash back and airline miles. Payment fees go to whichever processor is used by the business for its payment processing solution. Assessment fees typically go back to the credit card network and card brands (Visa, MasterCard, Discover, and American Express).
These fees usually amount to 3% of the transaction total, which adds up to a significant expense for a business to swallow! It is estimated that businesses pay $140-$160 billion in processing fees per year. Often, these fees are inflated beyond what they should be due to the complexity of the credit card payments industry.
Photo: Peshkova/Shutterstock.com
The dark side of processing fees
There is a common perception that card brands are behind processing fees, and nothing can be done about it. But the reality is many entities and factors affect these fees. For instance, most interchange fees actually end up in the hands of the issuing bank (the bank that issued the credit card to the cardholder).
New laws and rules are introduced every year—800 pages of rules for Visa alone! —costing businesses more and more. And in a scary consequence for consumers already dealing with inflation, new merchant processing fees are expected to make their way down to those consumers.
USA Today reported in an April 2022 article that Visa and Mastercard, who together own 70% of the credit card market, recently changed their fee structures. “The bulk of retailers will see increased costs, which will trickle down to consumers already struggling to make ends meet amid the highest inflation in 40 years,” writes Medora Lee.
If you’re a business owner, you are probably looking for a better solution. Many businesses don’t believe they can reduce these costs without sourcing a new payment processor, which can be a disruptive and costly process. Having someone in your corner with specialized knowledge of the credit card industry is how you can save your company’s bottom line.
How Verisave can help your business save money
Verisave is not a processor. Verisave is a cost reduction firm specializing in credit card processing fees and merchant account consulting, allowing them to look at the problem from a completely different angle. They’ve cracked the code by addressing the problem in a unique way— adjusting and optimizing the backend setup of the merchant account itself.
…It’s incredibly easy for our clients. We do the heavy lifting and we’re even able to tell you in advance whether there are savings worth pursuing.
–Verisave CEO Jeremy Layton
With more than 20 years of experience in the payments industry focused on credit card processing fees, Verisave has compiled mountains of industry benchmark data, a deep understanding of the rules and regulations, and extensive experience in optimizing merchant accounts. In simpler terms, Verisave goes through your fees, account setup, and processor agreements with a fine-tooth comb, pinpointing where overcharges are occurring so that they can be eliminated. The result? Most Verisave clients reduce their processing fees by a whopping 10%-30% without having to change their processing vendor.
“It’s a very intricate process on our end, but it’s incredibly easy for our clients,” Verisave CEO Jeremy Layton says. “We do the heavy lifting and we’re even able to tell you in advance whether there are savings worth pursuing. This makes it a very non-disruptive way to put that wasted spend back on the bottom line.”
It’s a niche offering that most finance teams don’t know exists. It’s also not something that can be accomplished in-house due to the rarity of the expertise involved. But just as companies now outsource operations like cybersecurity or HR, many are outsourcing merchant account fee management to Verisave.
Receive an estimate from Verisave
Based in Salt Lake City and founded in 2001, Verisave saved U.S. companies more than $100 million in 2021. Companies that are seeking an effective reduction to their processing fees can view a demo and receive an estimate from the Verisave team at Verisave.com.
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