A quick and dirty way to see what you really are paying with your current processor is to calculate the effective rate.
To do this you would take the total you paid to your processor and divide it by the amount of credit card sales volume you did for the month. For example, if you had $30,000.00 in credit card sales, and paid your processor $900.00 for that month, then your effective rate is 3%.
Too many merchants accept without question the discount rate that their processor says they receive. However, that discount rate is almost meaningless. Many other factors influence what a merchant pays, including:
Card type - a rewards card will cost more to process than a debit card
How often you batch out - you`ll get a better rate if you batch daily instead of every few days
Swiping the card through the terminal will result in a better rate compared to manually entering the transaction
Authorizing a credit card more than once will result in a higher rate being paid
This is really just the tip of the iceburg. Our company is one of the largest credit card payment processors in the U.S. I would be happy to analyze a current statement and provide recommendations.
What your business will be charged for processing credit cards will consist of several factors, including:
Your average dollar per ticket
Your overall sales volume per month
The type of credit card - for example rewards cards will cost you more to process than a debit card
How often you submit your batch (the batch consists of all the credit card authorizations made) daily you`ll get a better rate than if you wait several days to do so
If you swipe a credit card through a terminal you`ll get a better rate than if you manually key in the card information
Generally, as a new merchant, you`re going to get one of the best "discount" rates - the percentage fee taken out of each sale.
I work for one of the largest credit card payment processors in the United States, so if you would like more information, please feel free to contact me.