Operating a business in the modern world necessitates the ability to accept credit card payments. According to the 2017 TSYS survey, credit cards are utilized in over 25% of all purchases made across income levels. Offering credit card processing to your customers is mandatory for keeping up with the competition in terms of convenience and accessibility. Unfortunately, accepting credit card transactions also means you have to accept the fees associated with them.
Payment processing involves fees that vary drastically depending on the method of payment and the service utilized to process these transactions. Payment processing vendors each have their own 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 service, which requires a fair amount of research and a side-by-side comparison of options, ensuring you use the best service that fits your business needs.
Offloading Payment Processing Fees
While fees may be as inescapable as death and taxes, you can leverage certain techniques to relieve the burden of processing fees—partially or wholly. Three such methods for compensating for your service’s processing fees that have been used for decades by businesses are convenience fees, surcharges, and cash discounts.
Convenience fees or convenience charges are typically flat charges which customers pay when using payment methods that are more convenient for the customer and/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.
When charging convenience fees, businesses can offer customers additional payment options which incur fewer convenience fees. By charging more for specific transactions, you can funnel customers towards the payment processing method that is the least expensive or most preferred for your business, thus reducing your fees as well. Doing this also allows you to provide payment incentives that are favorable for your company, such as offering to waive convenience charges for payments that are made early or for opting into longer term contracts.
Surcharges, in contrast to convenience fees, tend to be percentage-based fees customers pay that are tacked onto the total cost of their purchase. Customers have also become accustomed to paying these fees over the years when making a purchase. Charging surcharge fees is similar to charging convenience fees in that these fees help businesses alleviate the cost of its payment processing service for each payment method. The percentage nature of surcharges allows you to set a constant rate matching the fee you are charged by your processing service.
Surcharge fee rules and regulations vary depending on the credit card company you’re accepting and the states within which the transactions are occurring. Cash discounts, however, are legal in all 50 states and are 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 require that you have proper signage on the doors that indicate posted prices on merchandise are the cash discounted prices. Placing signs at checkout that indicate customers can save a percentage on their transactions by using cash instead of credit cards will incentivize customers to use cash when making their purchases.
This allows you to legally charge a percent fee on credit card users that will cover 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, with no hidden fees or confusing contract terms, helps you offload those costs to your customers by utilizing methods such as cash discount programs. Seamless Chex provides payment processing services at consistently low rates without hidden fees or convoluted terms of agreement. Thanks to Seamless Chex’ consistent rates, it’s easy for your organization to set your own consistent and transparent fees, ensuring your business doesn’t have to pay processing fees out of pocket. Contact Seamless Chex today to explore ways to get free credit card processing for your business.