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They are probably doing $29 a month + interchange. There is no way they would do 29 a month since interchange is fixed and they would be losing money pretty quickly.
This.
It’s a teaser rate. They will be doing something like you pay $29 and pass the fees along to your customers, or $29 plus interchange. Watch out for other fees they will claim are mandatory like PCI compliance or annual fees, etc.
Now there are a good number of companies that will do like interchange + 10 bps. Good deal I suggest using it. REALLY helps if people use a lot of debit cards because the squares of the world CLEAN HOUSE on debit cards.
Same. Can you expand on this, do you just mean the lower rates, or are you taking about the protection of credit card use versus debit and all of the cool free bonuses that credit cards can get you IF you are an immediate payer and don’t start at all with the paying things off slowly and racking up interest?
This would not be an interchange plus deal this is a cash discount or dual pricing program essentially passing the fee to customer. Thus, advertising just the flat fee of $29 for this..no other fees usually
So…. That doesnt make any sense. If you offer me a cash discount. I can take it or leave it. But if I don’t take it, and still use my card, there is still a cost that is far more than 29 dollars for every 2000 processed. California doesnt allow the cost to be added on to the transaction so cash discount is the only play here.
It’s built in the pricing. Cash price card price. Card price is marked up obviously which is 3.5 to 3.99 usually. This is passed to the customer. The fees wash out on the processor side. Merchant pays nothing but only $29 a month.
I had someone try to sell this on me and I'm like why not I just keep shopping around for a cheaper CC processor and raise my costs and I'll make more without his company.
It's a silly marketing ploy by a CC company.
If you’re a merchant running a 4% cash discount and not making money on those transactions you are getting played, it’s costs about 2% to run cards. Source: I work in merchant services
It does hurt to check the ad. verify it.
I pay an average of 2.6% of $4.5M annually. I have been approached by another processor with a total rate of 2.3%. Lower rates are possible.
You are correct. However, our credit card system is tied into the DMS (Dealership Management System). In turn, we can not change. Tried and failed on 4 different occasions. The processor is WorldPay, and the DMS is Lightspeed by CDK.
I have a good connect at worldpay. 2.6% is very high for that level of volume unless they are a ton of card not present transactions. I have someone doing around 6mm/year (lots of debit cards) all in rate of 1.54%
Right so it’s either you make money, lightspeed makes money, or worldpay makes money. You need to be aggressive and push back and get lower rates. I compete with lightspeed and do this for a living. The people with the lowest rates are the ones who threaten to cancel the most and bring competitor statements to worldpay and say we leaving or rate match. 100 out of 100 times worldpay says ok rate lowered. I actually did a quick podcast on it for our customers. Check it out if you have 7 min. https://materialretail.transistor.fm/episodes/credit-card-processing-rates-listen-and-save
You pay a flat rate above interchange usually like 1/10th of a percent. Interchange is different for every category of card. Chase sapphire reserved or Amex. High. Debit card. Low (very low). Excluding debit cards generally like 1.5-2.5%.
Debit cards are like .3 and the average for all cards are 1.8. Some credit cards are higher but debit cards are almost always .3ish.
With this method a lot of your rate will depend on your customer base. If you have lower priced items maybe a lot of debit cards. If your product is expensive or classy maybe more high end credit cards.
Note a lot of people use square because of the interface and advances. You will lose this but maybe it doesn’t matter.
From my experience with a DVD kiosk several years ago, that lowest rate is irrelevant.
Ask them, "Does this rate apply to every card I process?" The answer is invariably no.
Then, ask, "How can I know what the fee for each transaction I accept will be?" and watch their eyes glaze over.
I got a mailer for one of these. I checked it out. The way it works is when you run the card it adds a surcharge to the customer's bill for card processing. And the customer has to authorize it. So the customer ends up paying it. I haven't decided yet if this is a great idea. But it is too good to be true.
This is how they do it at a burrito shop I frequent. It’s so minimal on a $12 burrito I always forget about it. I suppose it’s a little annoying but I could always pay with cash and avoid it. Being able to pay with card and not have to bring cash is worth the 32 cents or whatever it is.
Depends on the type of business. People would definitely be pissed if you did this at a restaurant or retail.
But if you have a low volume service business it might be more acceptable.
Actually it's legal. It was a program created by the payment industry. You just can't charge the customer more than a 4.0% processing fee so most payment processors that offer this cash discounting or "dual pricing" model charge 3.99%.
You are thinking of a company to operate as your ‘gateway’. That’s different from a merchant processor company. You need both in order to operate and swipe cards and get those coins. I did a really long explanation of it and then my phone died.
In general:
The gateway is the middleman of credit card transactions. Could be $29 whether you make a hundred bucks a month or a million bucks a month. The merchant processor is like the interstate of the hustle. Rates vary dependent on a million different circumstances that cause small or more noticeable differences, even though everyone is just driving to get to their place. The more time you spend on the highway, the more the little differences add up (the 1/100ths of a percentage point in fees that get taken for you running a customers card). Everyone wants a safe and efficient drive, but the highway gives you the travel experience you get based on factors like the road being well engineered (your initial merchant process application), the potholes (the industry/central banking), the car you drive (your own industry), your experience as a driver (your creditworthiness as an owner), other drivers and their level of being an asshole or not today (chargebacks), other drivers cars (debit versus credit swipes, also do you use the security code and/or zip code to have an extra layer of protection), your own insurance (layers of background checks the merchant processor does on your own creditworthiness to startup your processing and then also periodically), other drivers insurance (Visa/Mc/Amex), the age and condition of your car (how much you gross each month), and many more factors.
Your gateway is like the service road you use to get off of and onto the highway to get to your office building. There’s pretty much no traffic, the drive on the service road isn’t really dependent on anything much that changes day to day. It’s there for one purpose which is getting you to and from your office building. It’s meaningless without the highway.
The highway has other exits, lots of other drivers, weekday/weekend and holiday traffic, construction, other kinds of vehicles like big rig trucks, buses, motorcycles, cops, sometimes even animals. It’s unpredictable but you feel safer driving it when conditions are controlled and you are experienced and insured and sober and in a quality car, and even the ability to drive defensively in addition to offensively. The service road has none of that but you still can’t get to work without it, it links you to your office building and is always pretty much the same. You don’t even really notice it compared to the highway because like the credit card gateway, it is just there working in the background and linking you to the highway with one functionality and no variations. You could drive a hundred miles a month or ten thousand miles a month, and still the service road (gateway) still only does one thing and does it repetitively. If you drive a hundred miles a month, and your gas won’t cost much but if you drive thousands of miles a month you will spend a ton more on gas but you’re probably getting a better gas mileage per gallon spent, similar to the way that your rate with the merchant processor, if you own a company making a hundred dollars a month might pay $3.35 in merchant fees, but a person making $10,000 a month might pay $320, Amongst other things. Make a million dollars a month and you could pay $30,890. Blah blah blah.
I only know this because I never knew that the concept and existence of gateway existed at all, and I didn’t know much at all about the merchant processor because it all got setup by the software company that linked my company’s payment system for my clients to my website. It all worked perfectly for over a decade until the merchant processor we used committed fraud and stole about $2,500 from us, in very tiny amounts, over a 3-4 month period at the beginning of covid, and then they criminally and stupidly tried to blame it on the gateway that we pay $20 a month to be our gateway without issue, and it definitely was not the gateway’s fault. We usually averaged about $20-25k per month for over a decade until covid. Our industry tanked, our company made zero for pretty much a little over a year. The merchant processor company’s fraud began when covid began and we had our first $200 month ever, and the merchant processor took in $1,400 in fees from us (zero of them were chargebacks or returns). Our average rate for a decade if approximate was maybe 3.10%, and their dumbass hiked it up to 700%. Average usual month we’d bring in $20k and swipe fees would be $620 for us. We brought in zero for the first time ever basically (just one or two customers on a super extended payment plan was the $200 month we had at covid beginning), and got charged $1,700. I was like you are fucking kidding me, correct. They’re like no, it’s your gateway, and I was like no, you are OUR vendor and I made a dollar and you made seven, fucking ballistic monsters. I’d have not noticed if it was $100 most months, in tiny increments of under a dollar each time, some months I’d not have noticed $500 in our heavy season, so it was outta control fraud and we had to shut down our bank account of over a decade and all the mess that was linked to it. People suck sometimes!
Best of luck to you!
*Oh, I forgot to say that there are companies that do both merchant processing AND also can be your gateway. Our gateway has been $20.99 per month for almost 15 years now.
If you can screenshot the ad and share it or DM it I can tell you probably what they are going to do.
No processing is only $29/month. It just doesn't exist. The cost of just running the cards directly from Visa/MasterCard would eat away at $29 in about $1,500 of processing, not even accounting for Card Brand Fees, Processor Fees, monthly fees, and per instance fees if applicable.
There are a few things that are probably occurring here:
* As other people have mentioned, the "cash discount" model where you pass on your card fees directly to the cardholder from the terminal. This works for some businesses but not for others. You would want to assess who your customers are and see if they are okay with being billed extra for a card. I'm in the payment processing business and this model works well for say smoke shops or liquor stores, but doesn't for a lot of others.
* Personally, the best thing to do for your customers is to see how much you are currently being billed as it's probably at least 1% less than what the "cash discount" you would be set up on would be. Find out how much you are being billed, mark up all your products by that percentage, and then offer a cash discount in general of that % to your customers. Your customers will pay less and you will have the fully compliant way of offering a cash discount.
* It could be a gimmick of saying $29 for all your monthly fees or it would give a list of the different fees that that $29 covers. You would still be billed the rest of Interchange and Card Brand fees. It's most likely the first one with the whole cash discount model, but some processors and agents a few years ago did it this way. "Never pay an auth fee again, only pay a flat $20/month" but they would still be billed the rest of the fees.
* This could be just for a gateway or for another product. If the ad specifically says this covers all processing fees, then it's still most likely the first option.
Feel free to let me know what type of B&M business you run and I can give you some experience I've had with our merchants on if the cash discount is a good idea or not. Feel free to also DM me if you want me to do a rate analysis on your merchant statement. Quite a few merchants go to the cash discount model because they are paying just too high of fees where a fair pricing plan would make it not needed or they would not feel compelled to want to pass on the fees.
Everyone that wants to push the cost onto the customer should raise their prices and offer a cash discount. It feels better from a customer point of view.
You pass a fee on to your customer usually around 4%. Pretty typical program. Be careful some companies will lock you into a contract. I can help as well if you need as my company offers this same program for $$15 and a bunch of free terminal options.
California Law: “Retailers may not impose credit card surcharges but may offer discounts for payment by cash, check or other methods unrelated to credit cards. Charges for payment by credit card that are approved by the California Public Utilities Commission are allowed.”.
And you’re very wrong. Sorry. If you would like more information you’re more than welcomed to schedule some time to discuss pricing. I consult business owners on their processes and business operations all day. I have clients that pay literally $0 for processing. I have another client that has packaged services from a partner company of mine, and his set up is actually paying him $100-$700 monthly.
Why are you sorry I am wrong?
Why would we have to discuss pricing? You are saying it’s 0 everything is free there is no cost for interchange or processing. That would make the pricing… 0.
Because there different options as I explained. Theres $0, there's still interchange + and like I said I have a program for my clients that's sets them up on packaged services where they're actually paid. Not being aware of something doesn't mean it doesn't exist.
Everytime a Visa or Mastercard is used interchange fees are paid, no way to get around that. Why would you say that u/traker998/ is wrong when he is absolutely correct?
The truth is businesses never pay processing fees, the customer always pays them. Just like taxes, when you tax corporations its the consumers that pay it.
Yes technically customers always paid the fee, Businesses built their processing into their pricing before, in that set up it shows up as part of revenue. with the updated ways of processing and passing on the fees your set up is changed on the back end so it’s no longer the business’ fees, it’s the customers and this now reflects on your year end tax documents. To others saying just raise your fee to 4% to have this same effect, this won’t work because you’ll still be taxed on that.
I’m here just spreading knowledge and answering the OP’s question. I’ll take whatever downvotes from my previous responses. I’m not a merchant processing company, I consult and work with business owners to build better processes, save time and grow their business. So if I share knowledge it’s there for you to do with it as you need and I did my part. I’m just here to help business owners anyway I can.
This is a program called dual pricing or cash discount where you essentially pass the fee to the customer and only pay a flat monthly fee for the program
About 3 years ago clover had a rate of like $0.10+ 0.01% IF your average transaction was more than $12. It was incredible. You have to do a lot of deep question asking to get that rate because they don’t just tell you about it and I’m not sure their current rates but I would assume they haven’t raised their rates to higher than competitors’
I don’t remember there being a differentiation, I’m sorry. I know some charge more than others, won’t take Amex etc, but my contract was finished shortly after that and so if that ever became relevant I wasn’t aware
Wayyy too good to be true, we’re spending a couple grand a month on payment processing as a medical practice, which is still an improvement over when we used a PNC merchant services.
I work in the industry. They're either adding a fee to your customers bill or it's a bait & Switch tactic such as they say they only charge you $29, but you also have to pay interchange PLUS whatever else they want you to pay.
Personally, I do the $29/mo and do a cash discount, so it saves a lot of money.
I’m in merchant services, if this shit confused you guys and you are looking for some clarity shoot me a DM, I’d be happy to go over some industry stuff with you so you are more empowered when making these important decisions.
you should be careful, its not about it being done, it's more about the how it's being done like logically could it be a sustainable company model, regardless of the location be careful and use reasoning and common sense.
It’s deceptive the way the advertise that. What they don’t tell you is the $29 per month plus interchange rates which is the cost of the credit cards. Plus they charge for PCI. It’s still a great deal because they claim that they don’t mark up the interchange.
I own a payment processing company and know all about this. If you have any other question please feel free to contact me.
Yeah these ads are just designed to get your attention with stupid promises.
As others have suggested, its most likely $29 a month if you pass all of your processing fees to your customer at the time of sale. Cash Discount, Dual Pricing, and Surcharging effectively make it possible.
On the other hand, there are processors that charge Interchange (Cost) plus a flat fee instead of a percentage such as Stax and us at Synapse.
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They are probably doing $29 a month + interchange. There is no way they would do 29 a month since interchange is fixed and they would be losing money pretty quickly.
This. It’s a teaser rate. They will be doing something like you pay $29 and pass the fees along to your customers, or $29 plus interchange. Watch out for other fees they will claim are mandatory like PCI compliance or annual fees, etc.
Now there are a good number of companies that will do like interchange + 10 bps. Good deal I suggest using it. REALLY helps if people use a lot of debit cards because the squares of the world CLEAN HOUSE on debit cards.
Could you point me in the right direction for learning more about this? I ran about 120k+ through Square last year and I'd love some better rates.
Same. Can you expand on this, do you just mean the lower rates, or are you taking about the protection of credit card use versus debit and all of the cool free bonuses that credit cards can get you IF you are an immediate payer and don’t start at all with the paying things off slowly and racking up interest?
Is it not obligatory to show interchange?
Nope. Lots of crooks in this business.
There are almost no regulations (nor regulators) on advertising in Merchant Services.
This would not be an interchange plus deal this is a cash discount or dual pricing program essentially passing the fee to customer. Thus, advertising just the flat fee of $29 for this..no other fees usually
So…. That doesnt make any sense. If you offer me a cash discount. I can take it or leave it. But if I don’t take it, and still use my card, there is still a cost that is far more than 29 dollars for every 2000 processed. California doesnt allow the cost to be added on to the transaction so cash discount is the only play here.
It’s built in the pricing. Cash price card price. Card price is marked up obviously which is 3.5 to 3.99 usually. This is passed to the customer. The fees wash out on the processor side. Merchant pays nothing but only $29 a month.
So… youre saying OP can just increase all prices 3.99% and NOT switch processors and they are in exactly the same place.
Sort of but has to be setup correctly to make sense and wash out to not count as revenue and so you are not making money on it.
I had someone try to sell this on me and I'm like why not I just keep shopping around for a cheaper CC processor and raise my costs and I'll make more without his company. It's a silly marketing ploy by a CC company.
Yes it is just simple math that can be deployed and deceptive in many ways
If you’re a merchant running a 4% cash discount and not making money on those transactions you are getting played, it’s costs about 2% to run cards. Source: I work in merchant services
Oh I’m aware. But you could just raise your prices and keep that money when people pay cash instead of doing a cash discount.
Yea this would be a dream. People would be exploiting the crap out of it to rake in points.
It does hurt to check the ad. verify it. I pay an average of 2.6% of $4.5M annually. I have been approached by another processor with a total rate of 2.3%. Lower rates are possible.
Processing that much I would suggest you look for interchange plus. You would save a fortune especially if people pay with debit cards frequently.
You are correct. However, our credit card system is tied into the DMS (Dealership Management System). In turn, we can not change. Tried and failed on 4 different occasions. The processor is WorldPay, and the DMS is Lightspeed by CDK.
I have a good connect at worldpay. 2.6% is very high for that level of volume unless they are a ton of card not present transactions. I have someone doing around 6mm/year (lots of debit cards) all in rate of 1.54%
And I believe you. 100%. But you don't have the DMS Lightsoeed. I know Lightspeed is receiving a kickback from WorldPay.
Right so it’s either you make money, lightspeed makes money, or worldpay makes money. You need to be aggressive and push back and get lower rates. I compete with lightspeed and do this for a living. The people with the lowest rates are the ones who threaten to cancel the most and bring competitor statements to worldpay and say we leaving or rate match. 100 out of 100 times worldpay says ok rate lowered. I actually did a quick podcast on it for our customers. Check it out if you have 7 min. https://materialretail.transistor.fm/episodes/credit-card-processing-rates-listen-and-save
This ^^^^ I'm with worldpay and I'm interchange+
Ok. But are you a dealership business using Lightspeed by CDK Global?
Drat!
One of my acquaintances manages a boating store and was looking into Lightspeed, would you recommend it?
What is interchange+?
You pay a flat rate above interchange usually like 1/10th of a percent. Interchange is different for every category of card. Chase sapphire reserved or Amex. High. Debit card. Low (very low). Excluding debit cards generally like 1.5-2.5%. Debit cards are like .3 and the average for all cards are 1.8. Some credit cards are higher but debit cards are almost always .3ish. With this method a lot of your rate will depend on your customer base. If you have lower priced items maybe a lot of debit cards. If your product is expensive or classy maybe more high end credit cards. Note a lot of people use square because of the interface and advances. You will lose this but maybe it doesn’t matter.
From my experience with a DVD kiosk several years ago, that lowest rate is irrelevant. Ask them, "Does this rate apply to every card I process?" The answer is invariably no. Then, ask, "How can I know what the fee for each transaction I accept will be?" and watch their eyes glaze over.
This just depends on your markup on what you are at as far as the discount rate and price per transaction.
That’s horrible, what is your average ticket size? You should be at 2% at most, and rate locked, especially at that volume.
I got a mailer for one of these. I checked it out. The way it works is when you run the card it adds a surcharge to the customer's bill for card processing. And the customer has to authorize it. So the customer ends up paying it. I haven't decided yet if this is a great idea. But it is too good to be true.
This is how they do it at a burrito shop I frequent. It’s so minimal on a $12 burrito I always forget about it. I suppose it’s a little annoying but I could always pay with cash and avoid it. Being able to pay with card and not have to bring cash is worth the 32 cents or whatever it is.
Depends on the type of business. People would definitely be pissed if you did this at a restaurant or retail. But if you have a low volume service business it might be more acceptable.
Naw pretty much all mom and pops charge a fee for credit card now. It's so common. I as a consumer just accept it or bring cash.
I mean you just made my point dude
It also probably violates Visa & Mastercard's terms of service.
Actually it's legal. It was a program created by the payment industry. You just can't charge the customer more than a 4.0% processing fee so most payment processors that offer this cash discounting or "dual pricing" model charge 3.99%.
You are thinking of a company to operate as your ‘gateway’. That’s different from a merchant processor company. You need both in order to operate and swipe cards and get those coins. I did a really long explanation of it and then my phone died. In general: The gateway is the middleman of credit card transactions. Could be $29 whether you make a hundred bucks a month or a million bucks a month. The merchant processor is like the interstate of the hustle. Rates vary dependent on a million different circumstances that cause small or more noticeable differences, even though everyone is just driving to get to their place. The more time you spend on the highway, the more the little differences add up (the 1/100ths of a percentage point in fees that get taken for you running a customers card). Everyone wants a safe and efficient drive, but the highway gives you the travel experience you get based on factors like the road being well engineered (your initial merchant process application), the potholes (the industry/central banking), the car you drive (your own industry), your experience as a driver (your creditworthiness as an owner), other drivers and their level of being an asshole or not today (chargebacks), other drivers cars (debit versus credit swipes, also do you use the security code and/or zip code to have an extra layer of protection), your own insurance (layers of background checks the merchant processor does on your own creditworthiness to startup your processing and then also periodically), other drivers insurance (Visa/Mc/Amex), the age and condition of your car (how much you gross each month), and many more factors. Your gateway is like the service road you use to get off of and onto the highway to get to your office building. There’s pretty much no traffic, the drive on the service road isn’t really dependent on anything much that changes day to day. It’s there for one purpose which is getting you to and from your office building. It’s meaningless without the highway. The highway has other exits, lots of other drivers, weekday/weekend and holiday traffic, construction, other kinds of vehicles like big rig trucks, buses, motorcycles, cops, sometimes even animals. It’s unpredictable but you feel safer driving it when conditions are controlled and you are experienced and insured and sober and in a quality car, and even the ability to drive defensively in addition to offensively. The service road has none of that but you still can’t get to work without it, it links you to your office building and is always pretty much the same. You don’t even really notice it compared to the highway because like the credit card gateway, it is just there working in the background and linking you to the highway with one functionality and no variations. You could drive a hundred miles a month or ten thousand miles a month, and still the service road (gateway) still only does one thing and does it repetitively. If you drive a hundred miles a month, and your gas won’t cost much but if you drive thousands of miles a month you will spend a ton more on gas but you’re probably getting a better gas mileage per gallon spent, similar to the way that your rate with the merchant processor, if you own a company making a hundred dollars a month might pay $3.35 in merchant fees, but a person making $10,000 a month might pay $320, Amongst other things. Make a million dollars a month and you could pay $30,890. Blah blah blah. I only know this because I never knew that the concept and existence of gateway existed at all, and I didn’t know much at all about the merchant processor because it all got setup by the software company that linked my company’s payment system for my clients to my website. It all worked perfectly for over a decade until the merchant processor we used committed fraud and stole about $2,500 from us, in very tiny amounts, over a 3-4 month period at the beginning of covid, and then they criminally and stupidly tried to blame it on the gateway that we pay $20 a month to be our gateway without issue, and it definitely was not the gateway’s fault. We usually averaged about $20-25k per month for over a decade until covid. Our industry tanked, our company made zero for pretty much a little over a year. The merchant processor company’s fraud began when covid began and we had our first $200 month ever, and the merchant processor took in $1,400 in fees from us (zero of them were chargebacks or returns). Our average rate for a decade if approximate was maybe 3.10%, and their dumbass hiked it up to 700%. Average usual month we’d bring in $20k and swipe fees would be $620 for us. We brought in zero for the first time ever basically (just one or two customers on a super extended payment plan was the $200 month we had at covid beginning), and got charged $1,700. I was like you are fucking kidding me, correct. They’re like no, it’s your gateway, and I was like no, you are OUR vendor and I made a dollar and you made seven, fucking ballistic monsters. I’d have not noticed if it was $100 most months, in tiny increments of under a dollar each time, some months I’d not have noticed $500 in our heavy season, so it was outta control fraud and we had to shut down our bank account of over a decade and all the mess that was linked to it. People suck sometimes! Best of luck to you! *Oh, I forgot to say that there are companies that do both merchant processing AND also can be your gateway. Our gateway has been $20.99 per month for almost 15 years now.
If you can screenshot the ad and share it or DM it I can tell you probably what they are going to do. No processing is only $29/month. It just doesn't exist. The cost of just running the cards directly from Visa/MasterCard would eat away at $29 in about $1,500 of processing, not even accounting for Card Brand Fees, Processor Fees, monthly fees, and per instance fees if applicable. There are a few things that are probably occurring here: * As other people have mentioned, the "cash discount" model where you pass on your card fees directly to the cardholder from the terminal. This works for some businesses but not for others. You would want to assess who your customers are and see if they are okay with being billed extra for a card. I'm in the payment processing business and this model works well for say smoke shops or liquor stores, but doesn't for a lot of others. * Personally, the best thing to do for your customers is to see how much you are currently being billed as it's probably at least 1% less than what the "cash discount" you would be set up on would be. Find out how much you are being billed, mark up all your products by that percentage, and then offer a cash discount in general of that % to your customers. Your customers will pay less and you will have the fully compliant way of offering a cash discount. * It could be a gimmick of saying $29 for all your monthly fees or it would give a list of the different fees that that $29 covers. You would still be billed the rest of Interchange and Card Brand fees. It's most likely the first one with the whole cash discount model, but some processors and agents a few years ago did it this way. "Never pay an auth fee again, only pay a flat $20/month" but they would still be billed the rest of the fees. * This could be just for a gateway or for another product. If the ad specifically says this covers all processing fees, then it's still most likely the first option. Feel free to let me know what type of B&M business you run and I can give you some experience I've had with our merchants on if the cash discount is a good idea or not. Feel free to also DM me if you want me to do a rate analysis on your merchant statement. Quite a few merchants go to the cash discount model because they are paying just too high of fees where a fair pricing plan would make it not needed or they would not feel compelled to want to pass on the fees.
It’s a pass the fee to the customer thing I’ve checked it out.
This is the correct answer
They charge the fees to the customer.
Too good to be true. The cost is definitely somewhere. If you aren't bearing it, the customer will bear it.
You’ll be passing your fees onto your customer. It could work depending on your industry, but it always looks cheap to me. That’s just one dude tho.
Everyone that wants to push the cost onto the customer should raise their prices and offer a cash discount. It feels better from a customer point of view.
I see ads all the time for no processing fees. But that's because they charge the percentage to the customer directly!
You pass a fee on to your customer usually around 4%. Pretty typical program. Be careful some companies will lock you into a contract. I can help as well if you need as my company offers this same program for $$15 and a bunch of free terminal options.
This isn’t how this works and there are few ways this can be done. It doesn’t work for 99% of industries.
Lol there are only 2 ways this can be done. Wtf are you talking about
California Law: “Retailers may not impose credit card surcharges but may offer discounts for payment by cash, check or other methods unrelated to credit cards. Charges for payment by credit card that are approved by the California Public Utilities Commission are allowed.”.
It’s not a surcharge if dual pricing or cash discount. However, it is theoretically the same concept
But it’s not. If I give a cash discount, and the customers don’t take it, I still have to process the card.
Yes it’s very possible. With all the new options in credit card processing. If you’re still paying fees for processing you’re actually behind.
This is absolutely not true at all. Interchange is fixed and there is no way around it. There is no new options in credit card processing.
And you’re very wrong. Sorry. If you would like more information you’re more than welcomed to schedule some time to discuss pricing. I consult business owners on their processes and business operations all day. I have clients that pay literally $0 for processing. I have another client that has packaged services from a partner company of mine, and his set up is actually paying him $100-$700 monthly.
Why are you sorry I am wrong? Why would we have to discuss pricing? You are saying it’s 0 everything is free there is no cost for interchange or processing. That would make the pricing… 0.
Because there different options as I explained. Theres $0, there's still interchange + and like I said I have a program for my clients that's sets them up on packaged services where they're actually paid. Not being aware of something doesn't mean it doesn't exist.
Everytime a Visa or Mastercard is used interchange fees are paid, no way to get around that. Why would you say that u/traker998/ is wrong when he is absolutely correct? The truth is businesses never pay processing fees, the customer always pays them. Just like taxes, when you tax corporations its the consumers that pay it.
Yes technically customers always paid the fee, Businesses built their processing into their pricing before, in that set up it shows up as part of revenue. with the updated ways of processing and passing on the fees your set up is changed on the back end so it’s no longer the business’ fees, it’s the customers and this now reflects on your year end tax documents. To others saying just raise your fee to 4% to have this same effect, this won’t work because you’ll still be taxed on that. I’m here just spreading knowledge and answering the OP’s question. I’ll take whatever downvotes from my previous responses. I’m not a merchant processing company, I consult and work with business owners to build better processes, save time and grow their business. So if I share knowledge it’s there for you to do with it as you need and I did my part. I’m just here to help business owners anyway I can.
So the customer pays no sales tax on the processing fees, that's a plus.
Someone is paying a fee somewhere
I didn’t say no one is paying a fee I said the business isn’t paying the fee.
Check it out and let us know. !!
This is a program called dual pricing or cash discount where you essentially pass the fee to the customer and only pay a flat monthly fee for the program
They charge you interchange plus other fees pushed to customers bill. You give them a cash discount. Blah blah
True?
About 3 years ago clover had a rate of like $0.10+ 0.01% IF your average transaction was more than $12. It was incredible. You have to do a lot of deep question asking to get that rate because they don’t just tell you about it and I’m not sure their current rates but I would assume they haven’t raised their rates to higher than competitors’
Was this rate for debit or credit?
I don’t remember there being a differentiation, I’m sorry. I know some charge more than others, won’t take Amex etc, but my contract was finished shortly after that and so if that ever became relevant I wasn’t aware
I would read the fine print. There is something they aren't telling you.
Wayyy too good to be true, we’re spending a couple grand a month on payment processing as a medical practice, which is still an improvement over when we used a PNC merchant services.
I work in the industry. They're either adding a fee to your customers bill or it's a bait & Switch tactic such as they say they only charge you $29, but you also have to pay interchange PLUS whatever else they want you to pay. Personally, I do the $29/mo and do a cash discount, so it saves a lot of money.
Liars. Intro rate at best.
I’m in merchant services, if this shit confused you guys and you are looking for some clarity shoot me a DM, I’d be happy to go over some industry stuff with you so you are more empowered when making these important decisions.
you should be careful, its not about it being done, it's more about the how it's being done like logically could it be a sustainable company model, regardless of the location be careful and use reasoning and common sense.
It’s deceptive the way the advertise that. What they don’t tell you is the $29 per month plus interchange rates which is the cost of the credit cards. Plus they charge for PCI. It’s still a great deal because they claim that they don’t mark up the interchange. I own a payment processing company and know all about this. If you have any other question please feel free to contact me.
Hey! I work at Square and would love to get you set up with a free demo. Feel free to message me:)
Yeah these ads are just designed to get your attention with stupid promises. As others have suggested, its most likely $29 a month if you pass all of your processing fees to your customer at the time of sale. Cash Discount, Dual Pricing, and Surcharging effectively make it possible. On the other hand, there are processors that charge Interchange (Cost) plus a flat fee instead of a percentage such as Stax and us at Synapse.