Credit card processors are essential partners for businesses, enabling seamless transactions for customers. But not all processors are created equal, and some may quietly cost you more than they should. If you doubt your credit card processor may be hurting your bottom line, it may be time to reevaluate the relationship.

Here are five red flags that signal it may be time to part ways with your credit card processor.

Related: How to choose a credit card for your startup

1. Your discount rate is greater than five basis points or not disclosed

The discount rate is a critical component of your processing feesrepresenting the percentage charged for each transaction. If your processor's discount rate exceeds five basis points (0.05%) or is not clearly disclosed, this is a huge red flag.

Action step: If you don't see your discount rate, ask your processor to show it to you on your statement. Again, it should be 0.05% or less.

2. Your overall effective rate is greater than 2.5%

Your effective rate—the total fees you pay divided by your total processing volume—is a straightforward way to measure the cost of processing credit card payments. If your overall effective rate exceeds 2.5%, you're likely paying too much.

Processors often sneak in additional fees or hide fees. However, calculating your overall fee will allow you to see the true cost of processing.

Action step: Divide your processing fees by your total processing volume – this will give you your overall effective rate.

3. Your exchange fees are not fully disclosed

Interchange fees, imposed by card networks such as Visa and Mastercard, are non-negotiable. However, processors are responsible for passing these charges directly to you without adding unnecessary notes. You can lose money if your processor is meeting exchange rates. One way to tell is that they won't fully disclose all the information required to validate their charges. You should see 1) exchange categories – such as Data Rate II. 2) processing volume for each category and 3) fees charged per category.

Action step: If you don't see all three of the above items, you should ask them to change you to a statement that you do. They should make that change on your next statement.

4. Your processing fees have increased by more than 10 basis points in the past year

Exchange rates have remained relatively stable over the past 15 years. For example:

• In 2009, Visa's top rate was 2.95%, compared to 3.15% today.
• According to a Government Accountability Office (GAO) report, Mastercard's highest rate only grew from 3.25% to 3.3% during the same period.

If your overall processing fees have increased more than 10 basis points (0.10%) in the last year, the increase likely came from your processor – not interchange rates. Processors often increase fees without justification, relying on the complexity of statements and embalming increases in interchange fees for rate increases, even though they have barely moved.

Action step: Compare your current overall processing fees to a year ago. If you see a significant increase, ask your processor to show you on the Visa and Mastercard websites where fees have increased. Unjustified fee increases clearly indicate that it is time to look elsewhere.

5. You don't get reports on exchange downgrades or how to fix them

Exchange discounts occur when a transaction does not meet the criteria for the lowest possible rate, resulting in higher fees. If your processor doesn't provide a detailed report on reductions—including how many transactions were reduced, how much money was lost, and what steps you need to take to fix them—you're likely leaving money on the table.

Why it matters: Without this information, you are operating blind and unable to optimize your processing costs. A good processor should proactively help you minimize downtime and maximize savings.

Action step: Request a landing report from your processor. If they can't give one or offer actionable advice, find a partner who can.

Related: How to Use Credit Cards to Grow Your Business (The Right Way)

conclusion

Your credit card processor should be a trusted partner, not one hidden cost center. If any of these red flags resonate, you owe it to your business to explore better options. There are transparent and fair processors; switching can save your business thousands of dollars per year.

Breaking up isn't easy, but in this case, it could be one of the best decisions you make for your business. Take control of your processing fees, demand transparency and make sure your processor works for you – not the other way around.

If you'd rather fix it than screw it up, another option is to have your fees audited by a professional credit card processing audit firm. For full transparency, I run weAudit.com, which helps businesses with these issues. However, other firms work in this space, and you should explore all of your options and decide who and what works best for your needs.