Saying "no" to credit cards has become a sure shot sale killer. Almost all savvy business owners offer credit cards as a payment option now. Many customers only carry petty cash, preferring to use credit cards for purchases.

A business that offers credit card payment options has to pay fees to a processing agency or bank. Processing fee is a sore point for many business owners as they cannot justify paying a cut of their sales to another agency. Acknowledging the contribution of credit card sales to their profits will help business owners look at processing fees with more equanimity.

Business owners must evaluate the cost of the processing fees to the business by studying the monthly statements frequently. The cost should be adding value to your business.

How much processing fee is acceptable?

Fee is a percentage of the credit card sale value. This can be 2%-5% of the swipe. The percentage being charged to your account can be assessed by studying the monthly bank statements. Calculate the percentage cut per credit transaction. If the percentage is near 2%, that is great. If the percentage is at the higher end of the range then you need to look for another card processing agency.

Third-party agencies are giving good competition to banks. Many of these agencies offer services at much lesser rates. Survey the market to find a processor that charges near 2% as the processing fee.

Verify any additional fees being charged

Sometimes, monthly statements show charges apart from the regular processing fees paid to the credit card processing agency. Check with the processor and find out the charges. At times, additional charges make sense because an added service adds value to the customer and your business. The value of additional charges can only be evaluated if you inspect the monthly statement and spot the extra charge. If the charge does not make sense, and you have no option but to pay it, you need to change your credit processing agency.

Review the cost of the processing fees to your business by keeping a record of the monthly fees. Good processing agencies have a valid reason for levying an extra charge and inform you of it.

Compare notes with business associates

It is good strategy to compare notes with business associates to assess the benefits of a particular processing fee structure. After examining your monthly statement, compare numbers with the monthly statement of another business owner. This is also a good way of getting to know of a better credit card processing agency.

Credit sales form a good chunk of the total sales volume and paying a processing fee for the transactions is part of the package. Business owners can shop around for a good processing service that offers reasonable rates. They must also study monthly statements to ensure they are not paying unreasonable extra charges or a higher processing fee. All in all, credit card payments earn businesses way more than what the processing fee costs them.