Gym Credit Card Processing Rates and Fees 101

5 min read

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Reading your processing statement can be like trying to understand a foreign language. Most business owners accept it as a necessary evil for collecting payments, but it is important to know what you’re paying for.

Standard processing rates can be broken out into three or four main categories:

  • Monthly or quarterly fees
  • Payment Card Industry Compliance Fees (PCI) – which can sometimes be grouped into your monthly or quarterly total
  • Per transaction fees
  • Transactional rates

PCI

A PCI Compliance Fee is a cost all merchants must pay. This fee is imposed by the PCI Data Security Standards Counsel on all credit card processing service providers. Some payment processing companies will group this cost into their monthly total. A monthly fee is imposed by the processing company and is the fee paid to keep your account and information active monthly. These fees can range from $5 and up.

Per Transaction Fees

Per transaction fees can also vary greatly from processor to processor. These amounts are easy to calculate as they are a flat amount multiplied by the number of transactions in a period.

Insider tip: Businesses can reduce their number of transactions, especially around smaller retail items such as a bottle of water or a t-shirt, by adding those amounts to a member’s monthly bill. This also encourages members to keep a card on file so they do not have to bring their wallet with them to class.

Transactional Rates

Often the most confusing aspect of a processing statement is the rate breakdown. But what the heck is qualified vs. non-qualified vs. mid-qualified? Can I determine what my rate is going to be based on the card type?

The first thing to understand is there is no such thing as a qualified or non-qualified card but instead, this pricing tier is evaluated on a transaction by transaction basis. The other thing to note here is that these pricing tiers are set by the payment processing company, not the card companies. This means transactions cannot be compared across processors as the definitions of each pricing tier are not consistent industry-wide. However, there are some aspects of each transaction that will increase the rate you pay regardless of your processor. These include card not present transactions and whether it’s a rewards card like an airline mileage card.

Card not present transactions means the card is not swiped or inserted into a chip reader. This applies to credit card numbers that are manually entered, as well. The reason for this is the risk of fraud associated with that transaction. Having the card present reduces the likelihood that a stolen card is being used or an unauthorized transaction is being entered. The important thing to understand, especially in the fitness industry, is the tradeoff of running recurring payments vs. having to have each member bring in their card each month. Most business owners in our industry take this as a convenience fee to maintain recurring billing.

Rewards cards are extremely popular; if people are going to spend the money, they want to feel like they are getting something in return. What is often overlooked is that those rewards must get paid for somehow and that somehow includes charging higher rates to the businesses processing those cards. This is why it’s encouraged to get your members to to pay using ACH, as it can save you a lot of money every month.

Regardless of the processor and their unique price tier structure, there is a high likelihood that less than 5% of your monthly transactions will run at the proposed qualified rate. On the contrary, in the average month, roughly 40-50% of your transactions will be non-qualified. You could be forfeiting upwards of 3-5% of your monthly income in processing rates when you consider monthly fees and per transaction amounts. Bottom line, know what you’re paying for and don’t assume the base rate for all transactions.


Are you paying incredibly high processing rates with your current payment processor? Give us a call today to see how Zen Planner’s preferred payment processing partners can help lower your rates and increase your cash flow each month. New call-to-action

About the Author: Kelli Sweeting

I'm Coach Kelli, a devoted CrossFit gym owner with 15 years of experience managing my facility, along with owning yoga studios and wellness centers. Beyond the fitness world, I have a passion for cooking, cherish moments with my children and family, and find joy in spending time outside. Having experienced the highs and lows, I'm dedicated to leveraging my expertise to help you grow and succeed on your fitness journey.