Why Does Swiping Lower Merchant Fees?

merchant fees swiping credit card Y2Payments

Read almost any blog about lowering your credit card processing merchant fees, and you’ll quickly discover that one of the top tips is to swipe a customer’s card over keying it in. Why the simple act of swiping a card versus keying in the numbers is a mystery to some, but the explanation is fairly simple.

Risk Averse

Credit card processing companies tend to be fairly risk averse. In other words, they don’t want the merchants they work to be part of an industry that may be dangerous, they don’t want them working with customers who may not be legitimate, and they generally don’t want to associate with merchants who will cost them any extra money. Credit card fraud is at an all-time high today, and processing companies are sometimes held responsible for that fraud. As a result, they’ve developed a method of business that can only be described as awful.

The Swiping Debate

So, why does it matter if you swipe a card or key it in? Swiping is a safer method of card entry. Card numbers can be bought online in bulk. Physical cards, though, are harder to come by. Because card companies are so risk averse, they would rather have you swipe a card than key it in. If you’re swiping a physical card, the chances are far lower that you aren’t dealing with a stolen card, and because of that, they can offer lower merchant fees and rates to companies that choose to swipe over keying them in.

Other Ways to Lower Processing Costs

If you’re a company that can’t swipe a card, though, that doesn’t mean you don’t deserve low rates. instead, you simply have to choose a processor like Y2Payments that can help you get the pricing model similar to the rates government agencies — you deserve that.

To learn more about how we can help you deal with high processing costs, contact us today.