Money-Saving Tip: How To Save On Your Credit Card and ACH Processing

Everytime you do this you might be losing money

Every time you do this, you might be losing money.

Most martial arts school owners (and most small business owners, for that matter) are blissfully unaware of what a raw deal they’re getting on their credit card processing and ACH processing rates.

The fact is, the average school owner loses thousands of dollars each year, simply by paying excessively high rates on their credit, debit, and check transactions.

So, in keeping with my recent commitment to give you actionable ideas each week, I am going to use this blog post to explain:

  1. How school owners end up overpaying for their payment processing,
  2. And what you can do to save money on your merchant credit card processing.

Credit Card Processing, ACH/EFT Service Providers, And How You’re Getting Hosed

Nearly every business uses credit card processing in some shape or form. Most retail businesses have to have a credit card processing machine, because the majority of high-ticket transactions are paid for with credit or debit cards.

If you’re a school owner, I’m sure that you have a merchant credit card processing terminal sitting in your pro shop or office, and that it gets quite a bit of use. And, every time you swipe or key in a card, you’re probably throwing money down the drain (I’ll explain why in a minute).

But, the money you’re losing is not just on credit card transactions… you’re very likely throwing money away every time you process any electronic payment transaction – and that’s because it’s very likely you’re paying rates that are excessively high.

This includes the rates you pay for:

  • Swiping credit card transactions in your facility, either for tuition payments, retail sales, or paid-in-full accounts (sometimes called “POS” or “point-of-sale” transactions) –
  • Swiping debit card transactions (you may think this is the same, but it’s different – I’ll explain why in a minute) –
  • “Keying in” credit or debit transactions, either in your own credit card processing terminal, or into a “virtual” terminal online –
  • Processing ACH or electronic check transactions (“ACH” stands for “automated clearing house”, and is the system used to transfer funds between bank accounts in the United States) –
  • Any of the above transactions processed on an automatic recurring basis, A.K.A., your monthly tuition billing!

Now, if you’ve been reading my stuff for any length of time, you’ve come to know that I think people who use martial arts billing companies are suckers. Having said that, if you want to pay 7-10% of your gross profits for someone to punch a few keys on a keyboard, be my guest.

But if you’ve been paying attention, you’ve likely done the smart thing and started automating your credit card billing in-house (which is the same thing the billing companies do – with today’s technology, it isn’t that complicated). Bravo! Pat yourself on the back.

However, what you may not realize is that most merchant credit card processing accounts are set up wrongand most credit card processing sales people overcharge merchants as much as possible on their rates.

Here’s why:

  • Banks are the ones who actually process the payments. But in most cases, you don’t buy your merchant credit card processing services from the banks…
  • Instead, you buy them from a third party that represents the bank. And, they make money on anything they can charge you over and above what the bank charges them to process your account.
  • Ethical companies try to get you the lowest rate possible – So if you lucked out and found one, you’re one of the lucky few…
  • But some of these third party organizations are fond of over-charging naive, unsuspecting merchants like you – which ends up costing you a bundle. (Sound familiar? It’s what the martial arts billing companies have been doing to you guys for years – but their rates are considered unethical by even the worst of the folks selling credit card and ACH processing for the banks…)
  • How do they get away with it? Because the average business owner doesn’t understand how the whole system works, and half the time you can’t make hide nor hair of your processing statement anyway. Fees for this method of processing, different fees for that method of processing, and if you process on the third Monday of May under a full moon at 3 A.M. you pay “x, y, and z” administrative fees… it’s enough to make your head spin.
  • And, quite frankly even the most well-meaning of merchant services sales people often don’t know the best ways of setting up an account for different types of merchants. All too often, they treat every business the same, even though the rates on different types of processing vary considerably (swiped, keyed, recurring, and so on).

So, How Do You Fix It?

Well, first off you should know that you can switch processing companies any time you want. It’s a bit confusing, so it helps if you have someone to walk you through it, especially when it comes to reprogramming your equipment.

Second, you need to get someone who knows the system to audit your merchant credit card statements and see where you’re losing money.

My Recommendation

I have a contact at a company I work with who knows the “ins and outs” of the business. She specializes in lowering merchant credit card processing costs for small businesses.

At my request, she’ll audit your statement at no charge, and if possible get you a lower rate.

Don’t have a merchant account yet?

It’s not that big of a deal to get one – all you have to do is apply. My contact can also help you get set up to accept credit cards, debit cards, and ACH/EFT payments, at the lowest possible rate.

In addition, she can even set your school up so you can easily bill your students automatically each month via credit card, debit card, checking, or savings account.

Interested? Fill out and submit the following contact request form, and I’ll set up an appointment to have her call you directly within a day or two.


  1. Richard Hackworth on May 13, 2009 at 5:35 pm

    Excellent info. Thanks for looking out for the little guy.

    Best Regards,
    Richard Hackworth

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