Transaction processing costs do not only include merchant services processing fees. Other cost items, related to transaction processing, include indirect costs and opportunity costs. However, those who want to reduce their processing costs often focus only on the first of the listed components. They try to negotiate lower fees with the current processing partner or shop around for a new processor to offer the service at lower price, but as they neglect several important cost components, the strategy is not always effective.
Only by addressing the problem of credit card processing cost reduction in a smart and systematic way you can build an effective cost reduction strategy for your particular case. Each cost item – transaction processing costs, indirect costs, and opportunity costs – can be reduced in different ways.
A detailed description of smart transaction processing cost reduction strategies is provided in the respective article on Paylosophy.