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Credit Cards: Are Fees Eating Away at Your Profit?

When it comes to the credit card payment process, it seems like everyone wants a piece of the transaction – especially for B2B payments, which encompass larger dollar amounts due to businesses and government customers.

Businesses face the all-too-familiar challenge: Fees for accepting and applying credit card payments that may seem nominal can transform into sizeable chunks of profit. And yet, your business cannot remain viable if it doesn’t accept credit cards.

Credit cards remain one of the most popular methods of payment. And companies that don’t offer the option may seek out other organizations that do.

The question is this: How can you offer a payment gateway that reduces the fees around processing credit cards?

Deluge of Fees

Credit card payment, banks, card brands, and payment processors—they all collect a fee. Typically, the bank which issues the credit card gets the largest amount of that fee – around 1% to 3% of the transaction. The fee banks collect from merchants is called an interchange fee.

The drip, drip, drip of interchange fee payments may seem small at first, but it quickly adds up. The fees vary based on multiple factors, which makes it all the more complicated. They vary depending on the type of card (credit vs. debit), how the card is inputted (keyed or swiped), how it is collected (online, by phone, etc.) and the perks offered by a credit card (with cash back cards commanding larger fees.)

Imagine an interchange fee of 3%. It’s a small percentage, but it can quickly add up depending on the number and amount of transactions.

Let’s say that your company collects a credit card payment for an invoice totaling $4,500. An amount of $135 would be deducted from that payment. If that is a regular payment every month, then that amount rises to $1,620 each year. Now extrapolate that across multiple payments from multiple customers and you can see how that small fee has a large impact.

How You Can Reduce Credit Card Fees

It’s time to shut down the constant leaks.

Start by finding a provider that offers level 3 processing rates. This level decreases the percentage of fees needed to process a credit card payment and gives your business a greater level of profit.

A level 3 processing rate collects and sends a greater amount of data for each transaction. This includes information such as product code, item quantity, and description & destination zip code. By providing much more data for transactions, your business can take advantage of lower percentage rates for each credit card transaction.

Since level 3 requires more data, you might think this means you have to do more work to process each credit card transaction.

Not true.

The right processing company can streamline the transfer of this information behind the scenes - automatically. It’s the same level of work for you with no additional effort.

Payment Gateways

To leverage level 3 processing rates, find a payment gateway that can facilitate that rate. enables this. It also allows companies to set up their own, branded payment portals that accept credit card, ACH and PayPal payments.

When activated, the process looks like this:

  • Your customer receives their invoice electronically via

  • They click on a link in the invoice to pay it.

  • The link takes them to your company’s branded portal and payment gateway where they can input credit card information.

  • You pay less to process that charge. offers an added bonus. With it, customers can set up recurring payments so that your payment arrives via lower processing rates and lands in your banking account quickly and regularly. The portal even contains a messaging system, so customers can contact you directly to exchange notes, questions and more.


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