It's amazing how neglected payment processing is with most membership websites, web applications and software as a service (SAAS) solutions. It seems like billing and getting paid is a secondary concern, which is ironic and bordering on stupidity for businesses that rely on monthly credit card billings for the vast majority of their income. If you are serious about your website, web application or social media service's financial performance, it all starts with the structure of your merchant processing deal. Why?

• First, merchant processing directly affects the user experience (ux).
• Second, every payment processing fee you pay is simply a tax on your revenue. 
• Third, shelling out for unecessary fees is a great way to lower your company net profit.

Here are three strategies we've seen our clients use to lower processing costs and deliver a much better user experience:

1. Use a bundled Gateway and avoid a layer of additional cost. If you are using Authorize.net or another third party Internet gateway, you are paying for an extra lawyer of cost that you simply don't have to pay for. Some merchant processors offer full featured internet gateways that are totally free with your merchant account.  Free as in no additional monthly cost, and no additional per-transaction cost.  Instead of being charged “gateway access fees” and monthly charges, by writing your application's payment processing features to a bundled gateway, you will save money on every transaction.
   
   All bundled gateways are not created alike and application providers should be careful to be sure that a bundled gateway has the features your application needs (recurring payments, eChecks, etc...). A brief conversation with VPS can help determine the most painless way to move to a bundled gateway, the costs involved, and well as how much you can save on processing month after month.
2. Stop using PayPal as a primary payment method. Offer PayPal as a secondary payment method. PayPal is known for making it easy for developers to accept payments. Problem is, PayPal is also know for merchant-hostile policies and high rates. You can save 20-60% by switching to using a bundled gateway as your primary payment method and accepting PayPal as a backup payment method. This strategy allows you to get lower rates and more merchant-friendly terms on the majority of payments, and also supports your customers who use PayPal because they like to or have to.
3. Carefully audit your merchant statements. Everyone who sells merchant processing claims to offer low, low rates. Few actually do. With over 80 different fee categories and downgrades that are applied to each transaction, it's easy for an MSPs to write deals that simply don't get you the low rates you thought you were going to get. Instead, your transactions won't “qualify” or will have lots of “downgrades” that raise the processing fee. In our experience, the only way to be sure that you are not being ripped off by your merchant processor is to audit your merchant processing statements. As they say, the devil is in the detail.
   
   If your rates are not optimal for the kinds of transactions your website or application is accepting, then work with a processor that will help you optimize your rate plan to fit the kinds of transactions you are actually going to take. Oh, and if you are looking for a processor that can help, we not-so humbly suggest VPS.