Tips for coping with credit card rate increases

One of the consequences of the rise of the ecommerce market has been a shift in payment methods. While credit cards still rule the roost for brick-and-mortar stores, alternative methods of payment have taken off with the digital marketplace. According to a study conducted by yStats, credit card payments accounted for 40 percent of online transactions made in the Untied States in 2011.

Although PayPal has become the most widely used form of payment for online shoppers, ecommerce merchants must still be open to receiving credit cards. One of the costs of doing business is paying those processing fees. Some businesses have witnessed their rates go up recently, prompting Practical eCommerce contributor Phil Hinke to speculate that more banks could follow suit.

In light of these potential rate increases, Hinke offered several methods by which ecommerce businesses could mitigate the damage. The most important factor to consider is a merchant's ability to renegotiate his or her card processing rates. Those figures are not set in stone, and businesses may find that by contacting their bank, they may be able to bring their rates down. Hinke stressed the importance of staying calm and keeping emotions in check, no matter how egregious a rate increase may seem.

Staying apprised of pricing and contract conditions can help ecommerce merchants reach a satisfactory resolution in the event of a processing rate increase. For instance, knowing the conditions of a company's out clause could provide it with some leverage when negotiating lower rates. If a bank refuses to budge on its processing fees, an informed merchant could simply cancel their contract and take his or her business to a competitor with more lenient rates. Hinke cautioned that companies which consider this route should be absolutely certain that they have thoroughly researched available options to receive the best processing value. By taking the time to calmly assess their situation and options, ecommerce merchants can weather processing fee hikes.

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