Despite costing lower than traditional payment processing modes, the expenditure associated with online payment processing can get slightly overwhelming for merchants. This is especially true for small businesses that don’t have a steady sales streak. Therefore, managing their expenses such that the budget doesn’t go haywire is essential for such companies.

What are the significant changes?

Transaction charges aren’t that high. They become unmanageable only when the transaction charges from other payments are aggregated. Therefore, it is essential to know why payment gateway charges have been levied to understand how to reduce them. The significant parts of the charges are as follows:

Interchange Fee

Mostly non-negotiable, this is the fee that the issuing bank charges for handling the transaction. Generally, this comprises a minute portion of the transaction value.

Assessment Fee

The credit card network charges another non-negotiable fee for handling the backend formalities of the transaction.

Payment gateway charges

Payment gateway charges are negotiable fee amounts that are charged by the payment gateway for enabling a transaction. By opting for Zaakpay, merchants can get a reasonable quote as per their business requirements. This depends on various factors such as volume of transactions, payment modes, business type, and others.

Additional charges

Gateway companies often charge their customers for a few additional offerings. For example, most gateways have a setup fee to be paid while signing up. A monthly or quarterly maintenance fee is also charged in some instances. Moreover, additional features like statements or security facilities can be charged separately. Merchants might also have to bear incidental charges occasionally in case of chargebacks or batch processings.

How to reduce the costs?

By following the five ways mentioned below, merchants can considerably reduce their processing costs.

Sign Up for an affordable gateway service

Prices of gateway services vary based on features, offerings and several other factors. Few merchant-centric services like Zaakpay provide several advanced features at costs that are feasible even for small-sized enterprises. Therefore, merchants should opt for such gateway services that are within the affordable price range of the business. Thorough research about the gateway and all its charges, as mentioned above, is the key to estimating how much it would cost in the long run. Signing up for it makes sense only if it is not that financially straining for the business. With Zaakpay’s flexible price offering, merchants can get a quote as per their specific business requirements.

Furthermore, businesses with a considerable volume of transactions can request discounts or other benefits from their online payment

processing services. Gateway services generally offer such discounts considering that a high sales volume would generate decent revenues, even with a lower processing fee.

Putting a minimum threshold for payment

While it may be tough to suppress the urge of rejecting a payment, it is essential in the long run if the value of the payment is exceptionally low. A single higher value payment is more viable than multiple transactions of smaller value because the merchant has to pay charges for every transaction on his platform. Considering this, businesses often apply a minimum purchase value. However, this is tricky as sales may dip if the minimum purchase value is set too high. Keeping the type of business and customer segment in mind, a reasonable value can be fixed.

Minimize chargebacks

A business that is less prone to chargebacks can enjoy better rates in terms of processing. On the other hand, high-risk companies are charged more by their payment processors to cover the risks for the issuing bank and card network. Keeping this in mind, merchants must employ methods to reduce cases of chargebacks. Dictating a clear refund policy at the very outset is an excellent way to combat chargebacks. Having a gateway service that generates detailed transaction reports, such as Zaakpay, also helps. The statements here are proof of the transaction that can sway the chargeback case in favor of the merchant. With such methods, the merchant can portray the business as low-risk and reduce processing charges for the gateway company.

Using an AVS

Address Verification Service, or AVS, is an effective service that authenticates the legitimacy of a transaction further. The service requests the customer to provide the billing address along with other payment information. Ideally, it is supposed to match the provided billing address with the issuing bank’s records to complete the payment. Transactions coming from stolen payment details can be successfully averted using an AVS. This reduces cases of chargebacks and fraud and helps reduce losses. Businesses may also enjoy lower processing fees from the credit card network due to more legitimate transactions.

Become PCI DSS Compliant

Businesses that are not PCI DSS compliant are likely to incur more online payment processing charges. To avoid these charges, companies must acquire compliance certification immediately. Opting for a gateway service, like Zaakpay, that is already compliant can take this burden off the merchant. By complying, businesses also safeguard the customer’s sensitive data against cyber fraud, thus avoiding any legal complications or lawsuits.


With the tips discussed in the blog, merchants can significantly reduce their payment allocation towards gateway services. Zaakpay is an excellent payment solution for small businesses with its inexpensive payment gateway charges, and features that provide a better value-for-money to its customers. With Zaakpay’s payment gateway service at the helm of payment collection, merchants can fulfill their business vision with improved sales and reduced expenditure.