Free Credit Card Processing: A Guide for Small Businesses

No matter your business type, you’ve probably already noticed the rise in credit card processing services. In March 2022, The Wall Street Journal announced that VISA and Mastercard are planning to increase fees. For merchants, the Mastercard increase alone is estimated to result in a net annual increase of approximately 330 million USD.

Mastercard said they’ll lower costs for some credit card transactions below 5 USD to counteract these increases. Likewise, VISA plans to reduce fees for small businesses with an annual customer credit card volume of fewer than 250,000 USD. Regardless, these credit card statistics may mean you’re paying more for your merchant account — unless you’re taking advantage of free credit card processing for small businesses.

How can you get a free credit card processing for small businesses, and how can it help your merchant account? In this article, we’ll look at a variety of topics about processing fees, including:

• What is free credit card processing for small businesses?

• How much are processing fees?

• What are the advantages of free credit card processing for small businesses?

In addition, we’ll talk about ways to mitigate or negotiate fees so you can lower your monthly costs.

If you’re interested in free credit card processing, Zenti can help you apply and get approved for zero-cost credit card processing services, even if you’re in a high-risk industry. With free processing, you won’t have to pay a cent in transaction fees, whether your customer uses credit cards, debit cards, e-checks, mobile apps, or online payment options.

Demystifying Payment Processing Fees

Unless it’s a cash transaction, every payment involves some payment processing. For each of these transactions, as a merchant, you have to pay three fees:

• An interchange fee to the issuing bank

• An assessment fee to the credit card payment network

• A processing fee to the payment processing platform.

Payment processing companies typically use one of three types of pricing structures for their fees:

Flat rate: Flat rate pricing charges the same rate for every transaction and includes a percentage of the sale plus a fee. Flat rate pricing works exceptionally well for smaller businesses that don’t process more than 5,000 USD a month.

Interchange plus: This type involves a flat processor’s fee for every transaction. A variable percentage is determined by the interchange fee charged by the credit card company. Interchange plus works well for businesses with many credit card transactions because it allows merchants to negotiate the processor’s price.

Tiered pricing: With tiered pricing, the payment processor bundles the interchange fees into a variable rate structured into three tiers. This eliminates the need to charge different rates for every credit card brand. However, experts agree that tiered pricing isn’t especially advantageous to merchants because the pricing isn’t always apparent, making it difficult to negotiate fees.

According to credit card statistics, the average interchange fees per transaction range from around 1.5 percent to 3.3 percent. Likewise, the average credit card processing fees range from 1.3 percent to 4 percent. Notice that these don’t even include the payment processor’s fees, which will vary depending on the processing service you use. Plus, there may be additional monthly fees or a deposit for using the credit card terminal or mobile app reader.

As you probably already know, some credit card companies charge higher fees than others. For example, American Express has always been the most expensive credit card network. Higher fees are a prime reason why fewer merchants accept American Express cards. Fortunately, in 2018 American Express lowered its fees to be more in line with its competitors, but it still typically charges more than VISA, Mastercard, or Discover.

As if it wasn’t confusing enough, some payment processing platforms charge different processing fees for each credit card brand. Credit Card inconsistencies can lead to unnecessarily high rates. You’ve probably asked a store owner why they didn’t accept a specific payment type, only to be told, “The processing fees are too high.” Or, as a merchant, perhaps you’ve had to stop taking certain credit cards or other payment methods because of higher transaction fees.

With Zenti, you’ll never have to pay more for different credit card brands. Zenti’s pricing platform charges the same affordable transaction fees for each type of credit card. Plus, Zenti can help you get approved for zero-fee credit card processing, even if other payment processing platforms have denied you.

What is Free Credit Card Processing for Small Businesses?

Free credit card processing for small businesses provides a practical, affordable payment processing solution and enables merchants to take all payment methods without worrying about costly fees. With free processing, your payment processing platform adds a small service fee to every purchase the customer pays.

When the card swipes, the credit card terminal displays the processing fee and asks the customer if they’ll accept the charge; accepting the bill allows the customer to use an alternative payment method. After the credit or debit card transaction is complete, the service fee goes directly to the payment processing company.

Free credit card processing is called “zero-fee” or “no-fee.” The terms are interchangeable, and all mean the same: The merchant pays no fees on the transaction.

You’ll get the total purchase price for every transaction with free credit card processing. You won’t have to pay a penny in transaction fees, no matter what type of business you’re in or how many transactions you make each month.

How Necessary is Free Credit Card Processing for Small Businesses?

To answer this question, let’s examine how essential credit cards are to the American consumer. According to Federal Reserve and credit card statistics from early 2022, Americans owe around 807 billion USD through approximately 506 million cardholder accounts. The average credit card debt for an American family is around 6,270 USD.

This high percentage of Americans in debt is undoubtedly exacerbated by credit card use. Still, in our economic culture, credit cards, debit cards, and other electronic payment processing methods are more important than ever. And with online shopping statistics growing by leaps and bounds every year, consumers and merchants must have these payment processing options and the ability to pay through a virtual terminal. In 2022, U.S. eCommerce sales are predicted to surpass 1 trillion USD, and economists expect to see at least 300 million online shoppers by 2023.

Despite these numbers, credit card ownership numbers continue to go up. There are more than 176 million credit card users in the U.S. alone. Given these numbers, it’s more crucial than ever for business owners to protect themselves by seeking cost-effective, affordable payment processing services, mainly free credit card processing for small business merchant accounts.

Due to the popularity of eCommerce businesses, credit cards and remote payment options are here to stay. And even with the high percentage of Americans in debt, these convenient payment options will continue to grow in popularity, despite the sobering credit card statistics.

Fortunately, most customers don’t mind paying a small convenience fee to use credit cards and remote payments. With this in mind, if you’re interested in free credit card processing, your next step is to look for a merchant services provider that can connect you to a zero-fee platform.

Advantages of Free Credit Card Processing for Small Businesses

Here are some advantages of free credit card processing:

• You won’t have to pay interchange, assessment, or processing fees.

• You’ll be able to keep 100 percent of the sale.

• You won’t have to pay for the credit card machine.

• You’ll still be able to offer all payment methods, including credit cards, debit cards, e-checks, mobile apps, and online payment options.

• You’ll avoid monthly fees.

• Zero-fee processing provides added security because sensitive customer information isn’t stored in a mobile device or in-house server.

Free credit card processing helps you save considerable money in monthly fees. It also helps prevent fraud and mitigates resulting chargebacks, yet another reason many merchants prefer it over other payment platforms.

Credit and debit card transactions don’t have to be expensive. Zenti can help you get approved for free credit card processing for small business merchant accounts. You can enjoy all the benefits of accepting debit and credit card payment methods without paying more. Plus, Zenti can help your high-risk business get approved for all types of payment processing services, even if you’ve been turned down before.

How you can Avoid High Processing Rates

Even if you don’t have free credit card processing, you can still implement strategies to mitigate the high cost of processing. These tips can help you cut down on credit card surcharges and service fees:

Implement a Cash Discount Program for Your Customers 

By offering a discount for cash purchases, you’ll encourage more customers to reach for their cash instead of their cards. With cash transactions, you’ll always be able to avoid electronic processing fees.

Consider Taking E-check Payments

If you have an online store, you might find it advantageous to add ACH e-check payments to your roster of payment methods. Processed through the Automated Clearing House (ACH) network, this system allows customers to pay by check remotely, making it incredibly convenient if you have a lot of phone or e-commerce transactions.

ACH charges lower transaction fees than traditional credit card processors. ACH makes it an affordable alternative to debit and credit card processing, especially for small businesses. Plus, ACH is ideal for various payment and billing platforms and can be used for recurring and monthly subscriptions.

Keep an eye on Chargebacks

To mitigate chargebacks, use signage that clearly explains your refund policies. If you run an eCommerce business, post clear descriptions of each product with plenty of photos and video.

Train Your Employees 

With good cashier training, your staff will understand your point of sale (POS) operation system. Ultimately, these cashier training skills can help your staff communicate better with customers when facing transaction fees or declined transactions.

Negotiate With Your Payment Processor

Payment processing companies want your business. To retain it, they’re often willing to negotiate transaction fees. Based on your sales record, you can sometimes persuade processors to charge a lower transaction fee. However, this depends on the pricing structure.

Choose the Suitable Credit Card Processor   

The credit card processing company you choose can majorly impact your monthly finances. That’s why it’s vital to find a payment processor that offers free credit card processing for small business accounts or low charges fees that are affordable for your business. A good payment processor will also allow you to negotiate prices based on your sales volume and give you perks such as free credit card terminals and card readers.

If you’re looking for payment processing solutions you can afford, Zenti can help. As a leading payment services provider for high-risk merchant accounts, Zenti can boost your business with a wide range of safe, secure payment options, including major debit and credit cards, e-checks, mobile apps, and online payment methods. You’ll enjoy the advantages of multiple payment options, all at zero fee or low-cost pricing.

Plus, Zenti offers streamlined management solutions for billing and monthly invoicing so you can eliminate hours spent in unnecessary bookkeeping. With Zenti, you can rest assured that every transaction will be safely encoded or encrypted for privacy, with extra security to protect you and your customers from identity theft and fraud.

Contact Zenti to find out how we can get you the best, most affordable processing services your business needs and deserves.