Some might say that low credit card processing fees is the only thing to look at when choosing a payment processor. It means that if you find a processor that offers you low fees, you should immediately integrate your system with and migrate all your data to the processor’s platform. However, such a migration and/or integration makes sense only if its cost does not offset the savings from processing cost reduction. Moreover, while credit card processing cost is an important factor, it is far from being the only one to consider, when you are choosing a processing partner.
Beside ease of integration and migration we have just mentioned, the processor should support a bunch of vitally important functions and features, such as flawless reconciliation logic, automated chargeback handling, sound fraud protection, batch and real-time processing, withholding of taxes, convenience, and other fees. If necessary, it should even be able to handle subscription plans and support other recurring billing-specific functions. If you are a PayFac or a PSP, you should look at functionality related to merchant on-boarding and monitoring.
Electronic payment processing is associated with high risk. Even more so, if you come from a high-risk industry or geography. For example, an Indian tech support company might be considered a high-risk one, in terms of both geographical location and merchant category code (MCC). In order to offset the risks, the processor might charge more for credit card processing. If your monthly processing volume is low, then you can expect your credit card processing cost to be high, because processing fees are proportional to amounts and quantities of transactions you process on a regular basis. So, if you have problems with your processing history, represent a high-risk industry or region, or process relatively small monthly transaction volume, then you, probably, cannot afford cheap processing service.
Our advice is – before running after low processing fees, carefully consider, what you are going to get for your money. There is a high chance that you will find some “free cheese waiting in the mousetrap”.
Read more about cheap processing solutions in our respective article on Paylosophy.