Accepting credit cards for payment is an absolute must these days. However, merchants should strike a balance between the value of offering this convenience with the fees they pay. Learning about plans and pricing structures is vital to understanding your options. This quick guide to how a credit card surcharge works can help you choose the best card processing services for your business.

Understanding Credit Card Surcharges

Depending on your line of business and card processer, you could pay between 2% and 4% in processing fees for every transaction. That may not look like much on a $5.00 sale, for instance, but these can add up each month. Not only that, those fees can become substantial on big-ticket items – for instance, a $1,200 washer-dryer combo or an $800 vet bill for tests and procedures.

What Are Cash Discount Programs?

Merchants have a few solutions for dealing with these costs, but many opt to offer cash discount incentives. Cash discount programs have been around for a while. In 2011, they were authorized for use in all 50 states by the federal government. These programs work in a pretty straightforward manner: You just offer a small discount equal to the percentage of your normal processing surcharge. For example, paying with cash gets a 3% discount if you normally pay a 3% per-transaction fee.

What Are Credit Card Surcharge Programs?

On the other hand, you may decide to institute a credit card surcharge program instead. These programs are currently legal in 44 states, allowing merchants to pass some of all their surcharges onto customers who pay with credit cards. If you’re paying 3% in surcharges, for instance, your credit card customers pay an extra 3% on top of standard costs. Before you go all-in on a surcharge program, you’ll want to consider a couple of caveats:

  • Your business must be registered with Visa/Mastercard.
  • Surcharges cannot be applied to debit card transactions.

Point-of-Sale and Other Considerations 

Credit card processing, point-of-sale, accounting and invoicing systems can be purchased a la carte, but it may benefit you to bundle or choose them from the same provider. Whether you’re looking at software for veterinarians, fitness centers, restaurants, boutiques or other small businesses, an integrated solution can work seamlessly between these several components, resulting in improved efficiency and lower overall costs.

Keep in mind that you also have a wide range of options with systems and services. Wireless credit card terminals may be a must-have if you’re a retailer or restaurant offering curbside pickup or delivery service. Veterinary practices can benefit from a packaged solution with point-of-sale and credit card terminals bundled with practice management software such as HIPPO that includes scheduling, inventory tracking, medical records, reminders and other useful functions.

Choosing Your Merchant Services Provider

Whatever your needs, it’s wise to choose a merchant solutions provider with a robust selection of tools that can be customized for your business. Moreover, you should work with a provider with a sound reputation for integrity, transparency and world-class support. Anyone with a career in merchant services should understand what’s at stake for their clients and the rapidly developing innovations boost productivity, cost-efficiency and security.