How to Negotiate Better Payment Processing Rates for Your Dealership

Your payment processing rates aren't set in stone. They're the starting point of a negotiation. Processors expect you to negotiate — and they have margin built in to accommodate it.

Here's how to get better rates for your dealership.

The Negotiation Landscape

What's Actually Negotiable

Negotiable (processor markup):

• Processor's percentage markup
• Per-transaction fees
• Monthly fees
• Equipment costs
• Contract terms

Not negotiable (pass-through):

• Interchange rates (set by card networks)
• Assessment fees (Visa/Mastercard charges)

The goal: Reduce the processor's markup while keeping pass-through costs at their minimum.

Why Processors Negotiate

• Competition is fierce
• Customer acquisition costs are high
• Long-term relationships are valuable
• Your business has real value to them

They'd rather give you a better rate than lose you to a competitor.

Preparation: Know Your Numbers

Current Costs Analysis

Before negotiating, know your baseline:

1. Monthly volume: Total dollars processed
2. Transaction count: Number of transactions
3. Effective rate: Total fees ÷ Total volume
4. Payment mix: Credit/debit/cash breakdown
5. Average ticket: Average transaction size

Statement Deep-Dive

Pull your last 3-6 months of statements:

• Identify all fees you're paying
• Calculate your true effective rate
• Note any fees that seem excessive
• Find line items you don't understand

Industry Benchmarks

Know what's reasonable:

• Interchange: Fixed, varies by card type (1.5%-2.5% typical for credit)
• Processor markup: 0.15%-0.40% is competitive
• Per-transaction: $0.05-$0.15 is reasonable
• Monthly fees: Should be minimal or zero

Getting Competitive Quotes

The Three-Quote Minimum

Never negotiate with just your current processor. Get at least three quotes:

• Your current processor (retention offer)
• Two competing processors

Competition gives you leverage and market data.

What to Provide

Give each processor the same information:

• Monthly processing volume
• Transaction count
• Average ticket size
• Current rates (optional, but can accelerate negotiation)

What to Request

Ask for:

• Interchange-plus quote (most transparent)
• All fees itemized
• Sample statement
• Contract terms
• Equipment costs (if applicable)

Comparing Quotes

Don't just compare headline rates. Calculate:

• Total monthly cost: All fees included
• Effective rate: Total cost ÷ Volume
• Fee structure: Hidden fees? Long contracts?

The lowest quoted rate isn't always the best deal.

Negotiation Tactics

Tactic 1: Use Competition

Simply having other quotes changes the dynamic:

Say: "I've received a quote from [Competitor] at [rate]. Can you match or beat that?"

Most processors will try to match competitive offers.

Tactic 2: Negotiate All Components

Don't focus only on the rate. Negotiate:

• Per-transaction fees (often overlooked, can be reduced)
• Monthly fees (should be minimal)
• Contract length (shorter is better)
• Termination fees (should be low or zero)
• Equipment costs (buy, don't lease)

Say: "The rate looks okay, but I need you to waive the monthly fee and reduce the per-transaction to $0.10."

Tactic 3: Leverage Your Volume

Higher volume = more negotiating power:

Say: "At our volume of $[X] per month, I expect pricing that reflects our value as a customer."

If you're growing, mention projected volume:

Say: "We're opening another location next year. I want a partner who can offer competitive pricing as we grow."

Tactic 4: Ask for Rate Reviews

Build in future negotiating opportunities:

Say: "I'd like an annual rate review clause. As interchange changes and our volume grows, I want rates to adjust accordingly."

Tactic 5: Question Every Fee

Don't accept unexplained fees:

Say: "What is this $15 monthly statement fee for? I'd like that waived."

Say: "I see a $25 PCI compliance fee. What services does that include?"

Tactic 6: Negotiate Contract Terms

Long contracts with termination fees trap you:

Ask for: Month-to-month terms, or short contracts Ask for: No termination fees, or capped termination fees Ask for: Equipment ownership, not lease

Say: "I'm not comfortable with a three-year contract. I'd prefer month-to-month with 30-day notice."

Tactic 7: Get Everything in Writing

Verbal promises mean nothing:

Say: "Please send me a written confirmation of the rates and terms we discussed before I sign anything."

Review the final agreement to ensure it matches what was discussed.

Timing Your Negotiation

Best Times to Negotiate

Contract renewal: Most leverage; they want to keep you Volume increases: More value to offer Competitor offers: Active alternatives in hand Year-end: Processors may have quotas to hit After problems: Compensation for issues

Worst Times to Negotiate

Mid-contract with no leverage: They know you're stuck Without competitive quotes: No market data Desperation: Needing to switch immediately

The Retention Call

When you tell your current processor you're leaving:

What to Expect

They'll offer to match or beat the competitor offer. Often this goes to a "retention specialist" with more authority.

How to Handle

Be clear: "I've decided to switch to [Competitor] unless you can offer better terms."

Be specific: "I need you to match their [rate] and waive the [fee]."

Set a deadline: "I need your best offer by Friday."

When to Accept

Accept the retention offer if:

• It genuinely matches or beats alternatives
• You're confident in the ongoing relationship
• The terms are in writing

When to Decline

Decline and switch if:

• The retention offer still isn't competitive
• You've had ongoing problems with the processor
• Better service/features are available elsewhere
• They won't put it in writing

What Good Rates Look Like

For Mid-Size Dealerships ($100K-$500K monthly volume)

Interchange-plus pricing:

• Markup: 0.20%-0.35%
• Per-transaction: $0.08-$0.12
• Monthly fees: Minimal or zero

Effective rate (all-in): 2.0%-2.4% depending on card mix

For Larger Dealerships ($500K+ monthly volume)

Interchange-plus pricing:

• Markup: 0.15%-0.25%
• Per-transaction: $0.05-$0.10
• Monthly fees: Waived

Effective rate (all-in): 1.9%-2.2% depending on card mix

Red Flags

If you're quoted:

• Effective rates above 2.8% (almost certainly too high)
• Per-transaction fees above $0.25 (excessive)
• Monthly fees above $25 (should be less or zero)
• Long contracts with high termination fees

...there's significant room to negotiate.

After the Negotiation

Monitor Your Rates

After switching or renegotiating:

• Review your first few statements carefully
• Verify rates match what was agreed
• Calculate your new effective rate
• Confirm all fees are as discussed

Keep Records

Save:

• Written rate confirmation
• Contract/agreement
• Competitive quotes (for future reference)

Set Reminders

Calendar reminders for:

• Contract renewal (60-90 days before)
• Annual rate review (if agreed)
• Periodic competitive check (every 1-2 years)

Common Mistakes to Avoid

Mistake 1: Accepting the First Offer

Always negotiate. The first offer is rarely the best.

Mistake 2: Focusing Only on Rate

Total cost matters more than headline rate. Watch all fees.

Mistake 3: Not Getting Competitive Quotes

You need market data to negotiate effectively.

Mistake 4: Signing Long Contracts

Month-to-month or short terms preserve your leverage.

Mistake 5: Not Reading the Agreement

Hidden fees and unfavorable terms appear in fine print.

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Get Competitive Dealership Rates →

Anchorbase offers transparent, competitive pricing from the start — no negotiation games required. See what you'd pay before you commit.