Operating a business in the modern world requires the ability to accept credit card payments. According to the 2017 TSYS survey, credit cards represent over 25% of all purchases. Offering cash discount credit card processing programs to your customers is mandatory for keeping up with the competition in terms of convenience and accessibility.
Merchants and businesses that accept credit cards have to pay processing fees with every transaction and usually charge a surcharge fee to offset the cost. Payment processing fees vary drastically depending on the method of payment and the level of reward card that the customer uses. Each payment processing company has its unique fee setups, potentially involving numerous hidden fees or confusing systems resulting in unexpected fee totals once all is said and done.
Business owners should carefully choose the right vendor for payment processing, which requires a fair amount of research and a side-by-side comparison of options, including cash discount credit card processing. Ensure you use the best payment processing service that fits your business’s needs.
Offloading Payment Processing Fees
While fees may be as inescapable as death and taxes, and free credit card processing isn’t always an option, you can leverage techniques to relieve the burden of processing fees—partially or wholly. Three methods for compensating for your business’s processing fees that companies have used for decades are cash discount programs, convenience fees, and surcharge fees.
Convenience fees, or convenience charges, are typically flat charges that customers pay when using payment methods that are more convenient for the customer or cost more for the business to accept.
For example, paying by phone or over the internet commonly comes with convenience fees. Since customers have become accustomed to paying a little extra for the convenience of these payment methods, your business can charge slightly more for processing these transactions. If you can’t manage to find a processor that offers free credit card processing, this is a valid option.
When charging convenience fees, businesses can offer customers additional payment options that will help them avoid paying extra fees. Customers do not want to pay more for specific transactions and will allow you to funnel them towards the payment processing method that is the least expensive or most preferred for your business. Payment options can reduce the amount your company pays in processing fees if cash discount credit card processing or free credit card processing are not options.
Collecting convenience fees brings in extra revenue, and the company can then offer payment incentives to the customer that are favorable to the company. You could offer to waive convenience charges for opting into long-term contracts or making early payments.
Surcharge fees are different than convenience fees and tend to be percentage-based costs included in the total price that the customer pays. Customers have also become accustomed to paying these fees over the years when making a purchase, as free credit card processing is not often available.
Charging surcharges is similar to charging convenience fees in that they help businesses alleviate the cost of their payment processing service for each payment method. Surcharge fees are percentage-based, and you can set a constant rate that matches the processing fee the processor charges you.
The challenges in offering free credit card processing can vary per location and company. The rules and regulations for surcharges vary depending on the credit card companies you accept and the state where you process transactions. Substituting cash discounts for credit card processing fees, on the other hand, are legal in all 50 states and understood by customers of all ages.
Cash discounts are legal across the US and are a popular method for offloading credit card fees onto paying customers without risking alienation or requiring you to increase your prices. Cash discounts must have the proper signage on all doors that indicate posted prices on the merchandise are the cash discounted prices. You also need to place signs at checkout to let customers know they can save money if they pay with cash instead of credit cards. Doing so will incentivize customers to pay with cash when making their purchases.
Cash discount credit card processing – or offering discounts on cash purchases – allows you to legally charge a percentage to credit card users that covers your organization’s credit card processing fees, thus providing your business with free credit card processing capabilities.
Reliable and Predictable Payment Processing Fees
Finding a company that provides reliable payment processing with consistent and predictable rates and no hidden fees or confusing contract terms helps you offload those costs to your customers by utilizing cash discount programs. Seamless Chex provides payment processing services at consistently low rates without hidden fees or convoluted terms of the agreement.
Thanks to Seamless Chex’s consistent rates, it’s easy for your organization to set convenience fees and surcharge fees. Your business doesn’t have to pay processing fees out of pocket anymore. Contact Seamless Chex today to explore ways to get free credit card processing for your business.
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