In this issue
Try this: Consider alternative ways to take payments.
Apply for this grant: $5,000 from Breva™.
In the news: Business tax filings are open.
How can you save money on credit card processing?
Over the last five years or so, I’ve heard tons of complaints from business owners about payment processing costs. Some just absorb them. But others look for ways around them — adding credit card surcharges, discounting customers who pay in cash or turning to alternatives like Zelle.
The truth is that there’s no way to take credit card payments for free. But by accepting other payment methods, shopping around for lower rates and passing certain costs on to customers, you may be able to reduce your bill.
Is there free payment processing?
There’s no free way to accept a credit or debit card payment. But you can avoid processing fees by taking payments the old-fashioned ways — via cash, checks or bank transfers.
Anecdotally, more and more businesses are asking me to pay with Zelle. Zelle facilitates free, instant bank-to-bank transfers. I think this is a great option if your business checks these boxes:
Your bank supports Zelle for business (here’s a partial list).
You deal with customers one on one.
You send invoices or have another reliable way to give customers the email address or phone number associated with your Zelle account.
Unfortunately, Zelle presents some risk. If customers send a payment to the wrong account, there’s no guaranteed way to get it back. About 8% of peer-to-peer payment users have sent money to the wrong person, according to a 2024 Consumer Reports survey.
If you adopt Zelle, make it as easy as possible for customers to send money to the right address. Label your Zelle email address or phone number prominently on your invoices and make sure technicians have it on their business cards. That will hopefully limit payments sent to the wrong place.
Is there a cheaper way to take credit card payments?
Maybe. But it’s complicated.
There are at least three different parties involved in processing a credit card payment, all of whom need to get paid. The cost includes:
Interchange fees. These go to the bank that issued the customer’s credit card, like Chase or Capital One.
Assessment fees. These go to the card networks that facilitate payments, like Visa or Mastercard.
Payment processing fees. These go to the company that manages the logistics of taking the payment, like Square or Stax.
In general, those add up to 1.5% to 3.5% of a transaction’s total.
If you’re on the higher end of that range, you can shop around for payment processing, just like you would for any other service. But prepare to consider a bunch of different factors. For instance:
Most payment processing companies charge more for online sales than in-person ones.
Some offer volume discounts.
Others use “interchange-plus” pricing, which means they list what looks like a low rate — but you have to pay that amount plus the interchange fee.
Check with your bank, too. Many banks and credit unions offer their own merchant services, and they might offer loyalty discounts. Bank of America, for example, knocks 0.05% to 0.1% off of merchant services for members of its Preferred Rewards for Business program.
So what can you do to save on payment processing?
Lots of businesses are choosing the middle ground — encouraging other payment methods while leaving the door open for credit cards. More than a third of businesses now add a surcharge for credit card processing, according to a J.D. Power survey published in early 2025.
These might get some customers to pay cash while others simply absorb the fee. Either way, it could help your bottom line.
Want to dig in further? Here’s NerdWallet’s breakdown of the different ways you can pass on payment processing fees to customers.
Grant opportunity: $5,000 from Breva™
NerdWallet’s Karrin Sehmbi finds and shares these grant opportunities.
New year, new grant opportunities! Don’t sleep on this one. The application takes only minutes to complete, and you have two more weeks to get yours in.
Breva™ offers its $5,000 quarterly Thrive Grant to small-business owners who are dedicated to making a positive impact in underrepresented communities. A positive impact might mean job creation or increasing accessibility for certain products or services.
Along with the standard application questions you’d expect (contact information, business details, industry, EIN), Breva™ will ask you for a brief description of your business and how it’s helping your community. You’ll need to be able to prove that your business is earning revenue and that it was formed and operates within the U.S.
Click here to see the application. Q1 2026 applications close on January 31.
Check out our regularly updated list of more than 55 grant opportunities.
In the news: You can now file your 2025 tax return
The IRS started accepting 2025 business tax returns on Jan. 13.
If you’re ready, you should be able to file your federal tax return now. If not (and no judgment from me, I’m certainly not), focus on two things:
Do you think you’ll need professional tax prep help? If you don’t already have an accountant, find one as soon as possible. (This guide can help you figure out what to look for.) Accountants are going into busy season, and the sooner you can get on their calendars, the better.
Do you know how to issue 1099s and W-2s? You have to give tax forms to your employees or contractors (anyone you paid more than $600 to) by Jan. 31. If you’ve been keeping records of your payments, you should be able to generate them from QuickBooks or whatever accounting software you use.
What questions do you have about tax season? I’ll take them to CPAs and get answers before the Jan. 30 edition of this newsletter. Just reply to this email to ask. I won’t print your name or the name of your business.
