Credit card transactions are unavoidable for event venues. The fees and jargon can be a little overwhelming, especially if you’re new to the event space.
Fortunately, when you know what credit card fees are, it becomes easier to withdraw from programs that aren’t to your benefit and move to ones that are.
Today, we’ll go over what to expect from credit card processing fees for your event venue.
What are Credit Card Processing fees?
Credit card processing fees are the fees a business pays every time they accept credit card payments. There is no set credit card processing fee amount. Instead, event companies are charged a percentage of the final sale amount.
There are different types of credit card processing fees, each with a different percentage. Credit card transaction percentages also differ from network to network.
As you can imagine, the more credit card payments your event venue accepts, the higher the credit card transaction fees will be. It can also affect how you price your events menu.
For many, credit card processing fees can feel like too much – which is why it’s important to know how much you're paying, what you’re paying for, and how you can lower your costs.
Types of Credit Card Processing Fees
As mentioned above, there are different types of credit card processing fees. The most common are interchange and assessment fees, and payment processing fees.
Interchange Fees
The interchange fee is sent to the card issuer. Interchange fees aren’t static. It’s a percentage of the final amount, including tax. Interchange fees also change from bank to bank and the type of purchase made.
For example, interchange fees for online purchases charge higher interchange fees to cover the cost of extra cyber security.
Lastly, interchange fees are usually charged to event businesses at the end of the month as one large cost. The more purchases you had, the higher the interchange fees.
Assessment fees
Interchange and assessment fees are the most common for event businesses. Assessment fees are charged when event venues want to accept specific credit cards.
Unlike interchange fees, assessment fees aren’t based on individual transactions. Instead, assessment fees are charged based on the event business’s total monthly credit card transactions.
Payment Processing Fees
Credit card payment processing fees are how the credit card processor makes its money. The payment processor charges fees for all the credit card processing services.
Common payment processor fees include:
- Percentage-based fees per credit card transaction.
- Fees to lease credit card equipment from credit card companies.
- Monthly credit card processing fees.
- Fees for credit card statements.
Payment processing fees differ from network to network.
What are the Average Fees to Expect?
Credit card fees can be a tad overwhelming, especially if you aren’t making many event sales or you’re still new to the industry.
To get an idea of what to expect from different networks, let’s compare interchange fees and assessment fees for the biggest credit card networks.
Visa
Average interchange fees: 1.4% to 2.5% plus a small dollar charge, between $0.05 and $0.10.
Average assessment fees: 0.14%
You can find more information about Visa here.
Discover
Average interchange fees: 1.35% to 2.5% plus a small dollar charge, between $0.05 and $0.10.
Average assessment fees: 0.14%
You can find more information about Discover here.
Mastercard
Average interchange fees: 1.15% to 2.6% plus a small dollar charge, between $0.05 and $0.10.
Average assessment fees: 0.01% for transactions over $1000 and 0.13% for transactions below $1000.
You can find more information about Mastercard here.
American Express
Average interchange fees: 1.4% to 3.5% plus a small dollar charge of $0.10.
Average assessment fees: 0.15%
You can find more information about American Express here.
What Determines Your Interchange Fees?
As mentioned above, interchange fees aren’t static. Here are common factors that influence interchange fees.
- Percentage-Based Interchange Fees: Card networks charge a percentage off every transaction. The percentage also differs from card network to card network.
- Flat Rate Fee: Alongside the percentage interchange fees, some card networks also charge a flat rate per purchase. This charge depends on the card company’s policies.
- Transaction Type: The transaction type can also affect the final cost. Online purchases tend to cost more than in-person card charges. Whether you swipe your physical card or use a cardless payment method also affects the interchange fee. These charges differ from network to network.
- Business Size: Smaller businesses tend to pay more per charge than larger businesses. This is because credit card companies need to make up for the smaller volume of sales. Bigger companies also can negotiate better interchange fees with credit card networks.
Is There a Way to Lower Credit Card Fees?
While avoiding credit card processing fees completely is difficult, there are a few simple steps you can implement to lower costs for your event venue.
Negotiate Lower Credit Card Fees
The first step is negotiating with the credit card processor for smaller credit card processing fees. When your event venue is bringing in a large amount of monthly sales and doing so consistently, negotiate for a lower credit card processing fee.
Unfortunately, smaller event venues don’t have much leverage yet, so negotiations will have to wait until you bring in a noteworthy amount of transactions. Until then, work with a consultant to ensure you have the best credit card processing option for your business.
Ensure Accounts and Terminals are Optimized
Your credit card accounts and terminals can unwittingly cost you money. Faulty equipment and incorrect information also lead to chargebacks, which come out of your pocket. Ensure your terminals are optimized and that all information is correct and regularly updated.
Protect Against Credit Card Fraud
Installing all available credit card fraud protection services, like address verification and POS encryption, can also prevent chargebacks and make a more favorable case for you when negotiating a lower credit card processing fee.
If you’re not sure what is available to you, talk to your credit card network consultant about event venue fraud protection options.
Is it Possible to Pass Fees On?
While it’s important to accept credit card payments at your event venue for easier purchasing, credit card processing costs can add up to quite a large monthly fee. To offset these costs, is it possible to pass credit card fees on?
Yes, it is possible to pass fees on. You can pass credit card fees on to customers. Here’s how.
Cash Discounting
Cash discounting is when you offer event venue customers credit card and cash purchase options – with the cash option being significantly cheaper. Many customers choose the cash discount to save money. The goal is to encourage cash purchases so that you can cut back on credit card processing fees.
To stay legal, you need to showcase both the cash and the credit card charge clearly to customers. You cannot spring the credit card charge on them at the pay-point.
Credit Card Surcharging
Credit card surcharging is charging an extra fee to cover the credit card processing fees. You are essentially passing the credit card fee on to the customer.
Credit card surcharging is not legal in every state, so it’s important to research local laws before surcharging event venue customers. You also can’t charge a surcharge on debit cards, even if the same credit card fees apply.
Lastly, the amount you’re allowed to surcharge depends on what state you’re in. Most states don’t allow a surcharge of more than 4% of the total cost.
Is Credit Card Processing Secure?
Credit card processing is secure, especially for large credit card processing companies like Visa, Discover, etc. However, your cyber security and fraud protection play a big role in keeping payments secure.
To ensure all payments are secure, make use of fraud protection systems like POS encryption, address verification, CVV checks, etc. Talk to your credit card processing company about how you can accept credit cards safely and securely every time.
Conclusion
Credit cards continue to integrate more and more with event venue purchases. To increase payment accessibility at your events, you must offer credit card terminals and payment options.
Credit card processing fees can be a tad overwhelming for all its benefits. Fortunately, with this guide, you can demystify common credit card processing charges and optimize and lower your monthly event venue purchase fees.
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