Have you ever considered accepting online credit card processing? If not, you should.You’ve invested a lot as an entrepreneur. You may even put in well more than 40 hours per week, which many entrepreneurs tend to do in the early stages.You certainly don’t want to lose money for no good reason. But you already are when you accept credit card payments.Even if your customers pay on your website, online credit card processing fees can eat at your profits. You may think it’s the cost of doing business, and in some ways it is. Depending on your industry, location, and strategy, startup costs could range from as little as a few thousand dollars to well into six figures (or much, much more). Additionally, business owners have monthly business expenses, such as rent, utilities, advertising, and employee wages to consider.But you should know something: You can eliminate online credit card processing fees from your expense sheet.It just requires a different approach to how you have been accepting credit card payments.

How do online credit card processing fees work?

You don’t pay one fee to your merchant service provider (MSP). Numerous fees combine for an effective rate. The effective rate includes all the fees, including MSP markup fees (they have to make money!). Website credit card processing fees include:

  • Interchange fee: paid to the card-issuing bank
  • Assessment fee: paid to the card brand
  • Pass-through rate: a pricing model that includes interchange and assessment fees

It doesn’t end there. You may also pay cancellation fees when a transaction is voided. When a customer wants a refund, you may not get fees back when you refund them. Your MSP could even implement rate increases, which doesn’t make sense since they make a percentage of the transaction. For charges like cancellation fees, negotiate with your MSP. They should waive these. If they don’t, look for alternative providers. As you can see, online credit card processing fees get complex. Even worse, many MSPs put merchants on confusing multi-tiered plans that come with hidden surcharges and monthly fees. Why do MSPs do this to clients? Because they can. They know you’re busy running your business, and don’t have the time to investigate how website payment processing fees work. You simply pay for the convenience your MSP offers you customers, and focus on the business. It’s time to change that. Calculate how much you’re losing to online credit card processing fees. It should shock you. And it will motivate you to take action.

How much are online credit card processing fees?

Website credit card processing usually cost merchants more than offline payments. The average is around 2.9% plus $0.30 per transaction, versus 1.5%-2.9% for in-person processing. Why does website credit card processing cost more? Well, MSPs charge higher markups. And the likelihood of fraud pushes online credit card processing fees higher. Here’s what you’re paying for online credit card processing with the big providers:Stripe

Stripe Integrated Pricing


PayPal fees


Square pricing

So, Stripe, PayPal, and Square all have online credit card processing fees of around 2.9% plus $0.30 per transaction. If the average transaction at your e-commerce store is $100, you’ll pay $3.20 in online credit card processing fees to your MSP. (2.9% + $0.30). That may not seem like much, but it adds up. In fact, your business could increase profits by double digits by eliminating credit card processing fees (because it boosts margins!).

How much of your revenue comes from online credit card payments?

To know what you stand to gain from eliminating online credit card processing fees, you have to know how much you’re losing right now. Obviously, this is different for every online business. But credit cards are the preferred method of payment for 42% of online transactions, according to Statista.

Clearly, since credit cards are the preferred method of payment for online shoppers, you have to accept them. Now, you may think that 42% of transaction equates to 42% of your revenue coming from credit card transactions. It doesn’t. Statista research shows credit cards are used for high-value purchases:

Average value of transaction per credit card worldwide in 2016, by brand (in U.S. dollars)

Compare that to cash transactions. The Federal Reserve finds cash is more popular with smaller transactions (55% of all payments under $10 are made with cash).Even if less than half your transactions are completed with credit cards, it’s possible two-thirds of your revenue comes via online credit card payment. That means website credit card processing fees could take a significant portion of your revenue. You should work to prevent that bleeding.

How much are online credit card processing fees costing your business?

Let’s quantify this. Using an average transaction value of $100, you’ll pay $3.20 per transaction for online credit card processing.Now, let’s say you do 10,000 transactions per year and your annual revenue is $1,000,000. That means:

  • You’ll pay $32,000 per year in online credit card processing fees!

That’s insane. If your net margin is 10%, you make $100,000 per year as a business owner. That’s nice, considering it’s well above the average US salary.But you’re leaving a lot on the table. If you found a way to get rid of website credit card processing fees, you could earn $32,000 more. That’s a salary increase of 32%!Over a decade, that could mean $320,000 back into your pocket. That’s money you can use to expand your business, buy a bigger house, give to charity, and retire early.In short, it’s money you should make an effort to keep (and not give to your MSP). Easier said than done, right?In this case, it’s easily said and easily done.

How a cash discount program can boost your bottom line

As an e-commerce business owner, you don’t have to pay ridiculous online credit card processing fees. You just need a smarter strategy, one where you can still accept credit cards but avoid the processing fees. Enter a cash discount program—the solution your e-commerce business needs. With a cash discount program, you empower your customers to pay in a manner that’s most affordable and convenient for them. And you have a process in place to ensure you don’t lose money to online credit card processing fees. 100% legal and compliant, cash discount programs can enable you to take home 100% of your revenue. Want free online credit card processing at your e-commerce business? We can set one up within a week. Contact NadaPayments at +1 (929) 293-1800 or click the link below.

I Want FREE Credit Card Processing