Fee Fighters: Fighting for Low Credit Card Processing Fees

by Nora Dunn on 1 July 2011 6 comments
Photo: Kevin Spencer

Does your freelance business (or eBay or Etsy account, etc.) accept credit cards, or are you looking to incorporate credit card processing into your business practice soon? Have you turned selling stuff into a viable business that's ready to go to the next level? If so, Fee Fighters is a free service you might want to know about that can advocate for you and get you the best deal with credit card processors. (See also: 250+ Tips for Small Business Owners)

How Fee Fighters Works

After inputting some basic information about your business and credit card processing needs, Fee Fighters presents you with a list of competitive “bids” on their auction marketplace from their roster of vetted credit card processors vying for your business.

And the bid price is the final price, so you can safely compare apples to apples without worrying about statement fees or other extras after the fact. You can also scour the fine print by viewing contracts, and you can anonymously ask questions of the bidders to clarify your needs and terms. The idea is to keep high-pressuring salespeople out of the picture so you can make a decision on your own time.

Fee Fighters claims that their comparison search engine can save businesses an average of 40% on credit card processing fees, and they’ve helped over 15,000 businesses compare their credit card processing rates so far this year.

Although you can find reviews of credit card processors at sites like Top Ten Reviews and Third Party Processors, Fee Fighters is the only service of its kind.

"There aren't any that do quite what we do. There are some others that take your information and immediately sell it to credit card processing companies that pester the crap out of you. What we do is very different and was very hard to build... We don't expect any competition to arise in the near term," says Sheel Mohnot, VP of Marketing at Fee Fighters.

Processor Vetting

Fee Fighters requires credit card processors to become certified to their standards before they allow them on the marketplace to bid for your business. The terms include no hidden fees, rate hikes, or cancelation fees, and they’re audited monthly for compliance.

They’ll Advocate For You

A very powerful example of how the folks at Fee Fighters are willing to go above and beyond the call of duty for businesses is in how they helped a coffee shop owner navigate a very sticky situation with a few credit card processors and shady salespeople, and set her up with a new processor that saved her $7,000 in expenses and over 40% off her credit card processing fees. They even helped her recover an unexpected $1,000 termination fee from her old processor. The story is very compelling and can be read in full on the Fee Fighters site.

From a business standpoint, this speaks well to me. So many online services begin and end with the online experience, but Fee Fighters has live chat available, as well as a phone number you can call that a real person will answer. And in chatting with the folks at Fee Fighters, they assured me that the level of service they extended to the coffee shop owner above is available to anybody who needs it.

Why does Fee Fighters go above and beyond to advocate strongly for business owners? Partly because they only get paid once a deal is struck between the business owner and credit card processor. (It's like a finder's fee payable by the processor.) When pressed for reasons why they will help even beyond brokering a deal, Mohnot implied that we're all the same boat. "Frankly, we know what it's like to be a small business. We try to save any place we can and we know merchants...do the same."

Credit card processing is increasingly important for businesses to offer, especially if they’re location independent, since it increases options for receiving online payments. (Check out other tools for running your location-independent business, as well as these essential services for the road.) Heck — as a consumer I use my credit card for everything, so I’m much happier if I’m dealing with a happy vendor who isn’t being fleeced with credit card usage fees.

So if you’re new to the business of offering credit card processing, if you want to cross-check the fees and service you are receiving against what’s out there, or if you’re in a bind with your credit card processing and need help, Fee Fighters could be just the thing you need. Oh yeah — and it’s free.

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Guest's picture

While feefighters does represent a great option for small business owners who are overwhelmed with the process. There really is no substitute, if you are looking to get the lowest price possible, for having a 1 to 1 conversation with an experience sales representative who can tailor an account to your business. Quite simply there is no way with a few simple questions that any algorithm can fully and effectively figure out which method of processing (interchange or tiered) works best, or which type of credit card your business most often sees. Again for many small business owners this is a quick an easy way to get a solid quote, but it is misleading to think that a merchant working through FeeFighters will get the lowest price possible for their transactions.

Guest's picture
Ben

@ Gerald

The guys (and girls) at Fee Fighters will help a business owner to decipher the quotes that she receives to secure low rates. Their service functions much like ours in that businesses benefit from neutral advice and guidance without the sales pressure. Additionally, business owners are free to call or email a processor's representative directly should they choose to do so.

"When pressed for reasons why they will help even beyond brokering a deal, Mohnot implied that we're all the same boat. 'Frankly, we know what it's like to be a small business. We try to save any place we can and we know merchants...do the same.'"

It's important for business owners to know how a company like Fee Fighters generates income because the business owner is indirectly paying a residual commission every month. Businesses benefit from guidance before and after a processor is selected, but the motivation for ongoing service goes beyond an initial "finder's fee" paid by the processor.

Consultancy marketplaces like Fee Fighters and CardFellow earn a residual commission from processors when a business chooses to utilize their services. Some consultancy networks also charge processors an up-front commission in addition to a residual commission.

Processors pay the marketplace a monthly commission based on a percentage of net income earned from a particular business. For example, if a marketplace has a high residual commission of 60%, and the processor earns $100 from a business's processing in a given month, the processor would pay the marketplace $60. The cycle repeats every month for as long as the business utilizes the processor's services.

Of course, it's not the only reason, but residual commission is driving factor behind why consultancy networks provide ongoing support. Their support ensures businesses stay with their chosen processor for as long as possible.

Guest's picture

Ben,

Doesn't FeeFights working on a commission model dictate that the merchant is paying more than absolutely necessary?

Assuming the merchant processor is trying to keep its margins as thin as possible, the pricing they offer to a Fee Fighters customer has to have been padded to provide FeeFighters their cut.

Is this not correct? Just wondering how FeeFighters can claim to offer its users the lowest costs possible, when by playing a middle man they have to add cost?

Am interested if there is something I am missing.

Guest's picture
Eric

Fee Fighters is actually one of a few organizations that have popped up as of late designed to help merchants, especially smaller businesses. The merchant service industry has been preying on business owners who are unfamiliar with payment processing, and there are a lot of reps out there that will take a business to the cleaners with long-term contracts, high mid and non qual tiers, etc.

Not to say they are all bad, but Fee Fighters is definitely taking a step in the right direction. They will not let anyone advertise through them that does not offer interchange pass through, an evil word for many reps these days.

Keep fighting the good fight.

Guest's picture
Amy Carter

I agree that this industry has needed to be refined. So many businesses are having a hard enough time getting started as it is without the trouble of dealing with services that are way to high priced. Fee Fighters seems like they are making a legitimate effort to make the right moves in the industry. I believe as a result, they will acquire more business through their reputable actions

Guest's picture

I have had a very positive relationship with FeeFighters. They provide excellent services