Today I have seen more than 4 different ads from companies I haven’t ever heard off promising businesses the world of 0% credit card processing fees. This to me is a huge red flag and highlights the different ways some processing companies try and take advantage of those who do not know enough about the industry.

What is a cash discount? 

Cash discount is a term to processors will use when they allow a business to offer their customers a “discount” on the bill if they pay in cash. Now they can do this because if they pay in cash, there aren’t any credit card processing fees. Now a cash discount typically adds 4% to their total bill which does not get added if they pay in cash. A quick example would be you go to dinner and order $100 worth of food. Now without accounting for tax and tip, if the customer wants to pay their bill with a credit card, the bill would be $100 of food and a 4% fee for using a credit card to make the total bill $104. If they want to pay in cash, they get a “4% discount” so the bill would be only what they ordered $100. There isn’t really any discount, it is just a nicer term for passing your credit card processing fees to your customers. 

Is it good or bad?

That is up to the business owner to decide what is right or wrong for their business and their customers. Are the customers going to be upset, are your prices going to be higher on the receipt than your competitors, how much is 4% going to add to the bill? For a $20 item it isn’t as big of a deal, but if you are selling a $10,000 product, 4% is suddenly an extra $400 added to the customers bill. It depends on your business, product, and customers.

Why is every processor pushing this right now?

This industry is crawling with people trying to make a quick buck at the expense of uninformed business owners too busy to do research. Telling a business they can get rid of all their processing fees and save them thousands sounds like an amazing deal and it can be, but they don’t explain it isn’t right for everyone. What they don’t tell you is that the $100 monthly fee they add to it, could be brought down significantly since you are doing cash discount. They don’t tell you that for every card ran that doesn’t charge a 4% fee, the processor pockets the difference, making them a much higher percentage per transaction at the cost to your customer. 

What is the solution?

If you are reading this article, you are half way there. Do your research, and understand what your business needs are. The second half is to find a processor who you can trust. It is unfortunate in this industry that there are untrustworthy companies that just want to make the most money off your business with “too good to be true offers”. I am hoping this article is also showcasing that there are some processors including Paymint Pro that are fighting to protect and serve businesses by offering low, honest, and trustworthy services that match your business needs.

If you would like to see if Paymint Pro can help your business, please contact us today.