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What to Know About Processing Fees: The Ins and Outs

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When you start a business, you may expect some costs, such as employment or a facility lease. However, you might not think about payment processing fees.

For better or worse, you have to pay these costs to be able to accept money from your customers. Luckily, you can learn how these fees work and find ways to lower them.

Read on to learn more about these fees.

How Payment Processing Happens

Whenever someone pays your business, such as a membership fee or donation, someone needs to process that payment. The easiest way to do that is to use some sort of processor.

After your customer pays, your point-of-sale (POS) terminal sends that transaction to the processor you choose. The processor then sends the details to the credit card network of the card the customer used.

A credit card network then transfers the information to its issuing bank. The bank will verify that the transaction isn’t fraud and that your customer has enough funds. If everything looks good, you’ll be able to finalize the sale of a parks and recreation membership or activity. At the end of the day, the card network and payment processor will send the money to your business.

Types of Processing Fees

Unfortunately, you can incur different kinds of processing fees when accepting payments online or at your sports facility. Be sure to consider how some of these costs work and how they affect your business. Then, you can consider if one payment processor is more affordable than another. You may be able to save quite a bit of money over time, even if each individual transaction is only a few cents cheaper.

Interchange Fees

Most of your credit card processing fees will be interchange fees, and the issuing bank collects that money. These fees help with the bank’s operating costs and the risk of accepting credit cards.

While this money goes to a bank, credit card networks usually set the cost. You can expect to pay a percentage of the transaction plus a set charge.

Fees can vary based on the type of credit card as well as if someone has their card for payment or not. Unfortunately, you can’t usually negotiate these costs, but they do change a couple of times per year.

Assessment Fees

Credit card networks, such as Visa and MasterCard, also take small fees that you can call assessment fees. The cost is usually less than half a percent, but the exact fee differs between networks.

In some cases, the assessment fee is also different with credit cards and debit cards. If you have a high monthly volume, you might be able to get a different rate than a complex with a smaller number of transactions.

You can’t negotiate assessment fees, but you can choose to accept only certain types of cards. These costs will also remain the same no matter what payment processor you use.

Payment Processor Fees

One of the few processing fees you do have control over is your payment processing fees. Payment processors may be willing to negotiate if you bring in a lot of consistent sales.

Also, there are different processors out there, so you have your choice of which one you use. You can negotiate the fees that your payment processor charges you to lower your fees overall.

When choosing a payment processor, don’t sign a long-term contract. The rate may be good now, but that could change, so you need the option of switching providers when you want.

Incidental Fees

You might also incur incidental fees, which are more fees from your payment processor. An incidental fee doesn’t depend on the number of transactions you have, and they can vary between processors.

These fees usually cover things like chargebacks, customer disputes, and non-sufficient funds. Be sure to take these into account when choosing a credit card processing service.

Then, you’ll be able to take credit cards, but you can protect your business and its profit margin.

How to Lower Payment Processing Fees

With fixed assessment and interchange fees, it may seem impossible to lower your processing fees. However, you can do a few things to keep from having to pay more than necessary.

Before you choose a POS or online payment processor, take a look at all of their fees. You’ll be able to choose the processor with the lowest negotiable prices.

If you already have a processor, you can take the following steps to get the best rates possible.

Negotiate With Providers

Whether you’re looking to choose a new payment processor or you have one, consider negotiating processing fees. A good negotiation strategy can help you convince the payment processor to lower certain costs.

Of course, you’ll have to pay the same interchange and assessment fees no matter which processor you select. However, you should ask a processor to lower their fees for you.

This can be especially useful if you have a large volume of sales. The processor will know that you’ll bring them plenty of business, and you can save money working with them.

Settle Transactions Daily

You may also be able to slightly lower interchange fees if you settle all of your transactions each day. If you wait a few days to settle, you could incur higher rates from the credit card networks.

Make it a habit to settle transactions when you’re closing the sports complex for the night. You might not always get the lowest rates, especially if credit cards just raised the rates.

However, it can’t hurt to settle transactions often. You’ll make sure the transactions all go through, so you can keep from losing money on fraudulent transactions.

Markup More Expensive Methods

Another excellent thing to do when looking to lower processing fees is to charge more for more expensive methods. For example, a lot of businesses add online payment fees to cover payment processing costs.

That’s because some payment processors will charge you more if you run a transaction without the card present. Charging a higher amount to your customers can keep you from having to eat the higher costs of online registration.

You might also choose not to accept American Express cards at all since that card has a slightly higher assessment fee. Just like how a multi-sport complex may have different rates for each sport, you might charge various rates for different payment methods.

Reduce Fraud

Reducing fraudulent transactions can also help lower your payment processing fees. Of course, preventing fraud can keep you from losing money on inventory or time that you give to customers.

However, you can also keep from incurring excess payment processing fees related to fraud. Some fraud-related costs include chargebacks and non-sufficient funds (NSF) fees. You can reduce fraud in a few ways, such as taking chip cards and not accepting online payments. While you want to offer convenience, you need to also protect your business.

Common Payment Processors

When looking at processing fees, you may wonder which payment processor is the cheapest. Yes, you can negotiate fees, so the lowest on paper may not be the most economical for you.

However, it helps to have an idea of what you can expect to pay for processing. Then, you can determine if you want to negotiate to get an even better deal.

Here are some popular payment processing services and their average fees.


Domestic PayPal transactions will cost you 3.49% of the charge plus a fixed charge of $0.49. If you use PayPal and your customers pay with a card, you’ll pay 2.99% along with the same flat-rate fee.

When running a non-profit, donations you accept through PayPal will come with a 2.89% fee and a fixed rate. If you take PayPal transactions in your store with a card, the fee will be 2.70%.

Transactions that you have to key in will cost you 3.50% plus a fixed rate of $0.15.


If you choose to accept Stripe, you will have to pay 2.9% of the total transaction. Like with PayPal, you’ll also incur a fixed rate of $0.30 for all online transactions.

When you accept payments in your store, you will need to pay 2.7% of the total price plus $0.05. Wallet payments will incur the same fees as online transactions.

If you ever get a chargeback, you will need to pay a flat rate of $15 per transaction. PayPal charges $20 for each chargeback that you receive.


The standard processing fee from Square is 2.6% plus a flat rate of $0.10 per transaction. If you manually enter a card or use a virtual terminal, the fee increases to 3.15% plus $0.15.

You can also process invoices using Square, in which the fee is 2.9% plus $0.30. When you invoice a card on file, the price will be 3.5% plus $0.15.

Square covers your chargeback fees up to $250 per month, then you’ll be responsible for those costs.

Processing Fees Don’t Have to Be Scary

When you run a sports complex, you have a lot of costs to consider. Payment processing fees fall into that category, but they don’t need to overwhelm you.

Consider the types of fees as well as how you can lower them. Then, you can choose the best payment processor for your business. Are you looking for software to help run a successful sports facility? Request a demo today.

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