How To Reduce Credit Card Processing Fees

reduce credit card processing feesNo one likes to spend money they don’t have to. Even though payment processor fees are a small percentage of the cost of a transaction, when you have many transactions the costs start to add up. Fortunately, there is often a way to reduce these transaction fees.

By Reid Phillips, Senior Software Engineer

When a point of sale (POS) communicates transaction details via a request to a payment processor, the POS must minimally include certain transaction details. These details vary, but typically include information such as transaction amount, transaction type (e.g., sale, return, and void), etc. In addition to these required details, payment processors often allow additional information to be included in the transaction request, when available.

This additional information will vary by payment processor but can include such details as tax amount, purchase order number, and customer details. This type of information allows the payment processor to better understand and verify the transaction that is being processed, thus leading to a reduced transaction cost. For example, when customer information is added to the transaction request those details can be verified against the information associated with the payment card that is available to the payment processor.

Another means by which to reduce cost is to prefer card present payments. Due to the higher risk associated with manual entry credit card payments (i.e., typing account number, expiration, and other card details into a form) these types of transactions will often have a higher cost associated with them. Granted, it may be important for your company to allow for phone or online payments that make use of manual entry payments, but even in this situation transaction fees can be reduced by using card on file (i.e., card token) for repeat customers.

Does your integration between the POS and payment processor send additional transaction details to your processor when available? Does your integration support card on file for repeat customers? Contact a New West Technologies sales representative to discuss how our offerings support these features.


Reid Phillips has a Ph.D. in Computer Science from the University of Arkansas and along with being a Senior Software Engineer, teaches Software Engineering as an adjunct professor, passing his knowledge on to the next generation. Reid also enjoys playing volleyball during his off time.