Let’s get to know the terms in detail. Credit Card Processing has become a matter of burden for many merchants who are unable to make a noticeable profit in their business calendar. Merchants who support small businesses often lose their significant amount of profits to interchange fees due to their tighter budget compared to their powerful competitors.
It is also referred to as “Swipe Fees”. This is the stipulated amount of revenue (1-4%) that is charged if they accept Credit Cards.
Now what is Cash Discounting? Merchants with this financial concern are looking for solutions by which they can accept Credit Cards without having to give their profits away in the form of interchange fees. An answer to this vital problem was given by the recently released Cash Discount Programs or Cash Discounting. Even though it has solved a number of issues in this regard, there has been speculations and confusions around its potential and difference from Surcharge.
Now, let’s come to the second term, Surcharge, by the word itself it can be made out that it is related to overpricing the actual price of the products if purchased by Credit Cards. Surcharges are added to the existing taxes. It is simply the increment of cost of purchases. Surcharges cannot be applied on Debit Cards. Surcharges are based on a percentage of the total price of products (that is very specific to the total price) before the taxes are assessed.
Further, we move on to study what is Cash Discount Program? By this program, merchants are offered to purchase products by cash at a lower-prices compared to the ones if bought by Credit Card. A Cash Discount works by applying a customer service fee on all customer transactions and this fee is removed if the customers are encouraged to pay with cash instead of Credit Cards.
If you are looking for the best operating Cash Discount Program in Merchant Services, there are n number of agents selling cash discounting in the market. But to assess and evaluate the most suitable program for your business you need to follow some steps. Listed below are the guidelines to picking agents selling cash discount programs.
- Give legality priority: There are many Cash Discount Programs which are not legal in terms of adhering to the Federal Standards. To choose the authentic ones, you need to check if your agent has good standing with the BBB and can provide you clear evidences that they adhere to the State and Federal Laws in all their processes.
- Equipment: You have to make sure that the provider has the equipment alongside technology that accepts all card types like Credit, Debit, etc. In addition to this, they should accept mobile wallets and EMV chipcards.
- Hidden Charges: Some providers do not maintain transparency with respect to the unnecessary charges they apply. You have to make sure they don’t charge you without any legit cause.
- Options of Fees: A good provider will offer two service fee pricing options. A flat fee or a percentage of the sale amount. Choose the one appropriately suited for your business.
- Support: This is the most important criterion. Beside other aids, make sure your agent has a hotline to answer all your queries in future.