As credit cards have become the most popular payment method in the United States, most have sought ways to boost their profit margins by lowering or eliminating fees through zero-fee processing. As a merchant, you probably pay around 2 to 3 percent in processing fees for every credit card transaction. A Zero Processing Fees Program will pass the fees to your customers, so your business is paying nothing to process the payments.
Zero Processing Fees Program may only be suitable for smaller businesses, as it could create a poor customer experience or prove counterproductive for various reasons. Generally, you can implement such a program if you are a business owner with annual revenue of a minimum of $200,000. There are two approaches to zero processing fee programs: cash discounts or surcharges.
Using a cash discount program means you are offering a discount to the customers who pay by cash instead of using credit or debit cards. On the other hand, a surcharge program will add a percentage to every credit card transaction on top of the product or service price.
For example, if you list a product's shelf price at $15, a cash discount program would mean charging cash-paying clients less than $15 at the register, while a surcharge means charging card-paying customers more than $15 at the register.
A cash discount program is best if:
Conversely, a surcharge program is best if:
Suppose you want to implement a cash discount program, you can alert your customers that paying with cash will qualify their purchases for a discount. This way, you will encourage cash transactions while letting your clients know there are benefits to paying with cash.
Generally, any business or industry that processes credit cards is eligible for a zero processing fee program. With the help of cash discount technology, you can save hundreds and possibly thousands of dollars per month and keep up to 100 percent of the transaction amount. These savings will allow you to invest in other parts of your business to help you grow.
Some of the industries that can use zero processing fees programs include, but are not limited to:
Choosing a zero-processing fee program provider is essential to lower your costs and raise your profit margins. Using such a program has many benefits, from increasing your profits overnight to eliminating costly processing fees and getting a free credit card terminal.
One thing is for sure; zero fee processing is something every merchant should consider. And because there are several options you can choose from, it is best to ask for assistance in weighing your options. Make sure to select your payment processing provider wisely; choose one that will help you implement the program correctly and not disguise surcharge solutions as cash discounts.