How to Charge More for Credit Card Transactions
- 1). Determine the merchant fees for your business. These fees will vary based upon the type of business and the type of merchant account you have set-up. Typically, the more transactions your business performs, the lower the merchant fee per transaction. For example, say a gas station pays $.20 per transaction plus two percent of the sale. On a $50 transaction, the merchant fee would be $1.20. ($1.00 is two percent of $50 plus $.20.)
- 2). Determine the premium you want to charge your customers for using a credit card. You can keep the premium exactly at the merchant fee cost or you can build in a cushion to allow for the varying amounts of different transactions. For instance, in the above example, $1.20 is 2.4 percent of the sale. If that person only spent $10, the merchant fee would have only been $.40, representing four percent of the total sale. Building in a slight cushion will allow for the varying merchant fee percentages.
- 3). Implement this premium change into your credit card charging software. Depending on the system and your type of business, implementation will vary. However, in any system, you want to be sure to add your new premium to the cost of all credit card transactions.
- 4). Create ample signage that alerts customers that using a credit card will cost them the additional premium. You want to be sure to give the customers the option to pay in cash and save a little money.
- 5). Continue to monitor your merchant account. You want to ensure that your premium charge is covering the costs paid to the merchant processor. Also, if a more competitive merchant account will let you cut your rate, you can pass the savings onto the customer by lowering that premium.
