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Cash Discount

Cash Discount

Credit and debit card transactions have a tangible processing fee associated with them that merchants must pay. As a result, some businesses are reluctant to take credit and debit cards for small purchases. This is where cash discount comes in: designed to work for merchants, cash discount is a program that allows merchants to pass the card processing fee into their customers by offering a discount for paying with cash or a check. This is different from a surcharge for credit and debit card users in that the “normal” price of the transaction is the price that credit and debit card users would pay, and customers that use cash or check would receive a discount. A surcharge would mean that the “normal” price of the transaction is what cash or check payments would cost, and those who pay with a debit or credit card would have to pay an extra processing fee. 

Credit Card Processing

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Here’s how PayArc’s cash discount program works: Say your card processing fee is 3%, and the normal price of a certain transaction is $15.00. The customer who pays with a credit or debit card pays $15.00. However, if you have a cash discount of 4%, and the customer chooses to pay cash or with a check, they would only pay $11.25.

Important: merchants must post the price for cards on the item. If you post the price for cash and then charge the customer more for using a credit or debit card, that charge becomes a surcharge, which is prohibited by Visa and MasterCard rules.

Cash discount can be great for your business and is compliant with all laws, as well as Visa and MasterCard’s rules. Contact PayArc today to find out how to implement this program and grow your business!

Cost Saving Credit Card Processing

Join thousands of other businesses who trust PayArc and save your money on credit card processing fees.