Are you being overcharged for credit card processing services? That’s a question that not enough business owners stop and ask themselves, considering how much they have to worry about with the day-to-day hassle of operating a successful business: employees, inventory, taxes, regulations, you name it… And yet, every dollar saved in operating expenses is another dollar of hard-earned profit!

So, with a little help from this handy new infographic, let’s take a look at exactly how credit card processing rates are calculated, who gets how much of the pie, and what business owners can do to get a cheaper wholesale rate for credit card processing.

The first thing to understand about the pricing of credit card processing rates is that there are two separate layers of charges to consider: the “true cost” of the processing itself, and the “markup” which processors and others tack on to make more money for themselves, at the expense of hard-working businesses. The “true cost” includes the actual transaction fee charged by the credit card company, bank, or rewards card program involved in the transaction, and it is consistent across all processors – in other words, this isn’t the charge business owners have to worry about.

What should concern them greatly, however, is the “markup cost”: the lavish increases which processing companies charge to boost their own profits. The markup cost can include everything from the markup itself (often 1-2%) or a salesperson’s commission to PCI fees, IRS fees, surcharges, and statement fees. All in all, markup often accounts for 40% of an entire credit card processing bill! As crazy as that sounds, it’s true, and businesses around the world are losing revenue because of it each and every day.

So, what can a business owner do to reduce or eliminate the markup on their credit card processing? The answer is simple: move to a credit card processor that charges the true cost with no extra markup. Such services are often available on a cheap subscription basis, where they charge a flat rate (such as 10 cents per transaction) rather than a percentage-based markup, which saves most small businesses literally hundreds of dollars each month – and thousands per year. Now that’s good business!

Are you being overcharged with Credit Card Processing?