Credit card processing is becoming expensive for merchants, especially for small businesses who have tighter budgets and may not bring in as much revenue as their larger competitors. By accepting credit cards, businesses face the financial burden of processing fees. On average, fees range from 2-4% (that’s equivalent to between 8%-15% of the owner’s net profit). As a result, many small businesses are looking for solutions to keep accepting cards, but avoid the monthly processing fees.
Federal regulations have recently changed in favour of business owners and as a result, businesses are now able to legally offer a cash discount program which eliminates 100% of the much despised credit card processing fees.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Durbin Amendment”), a federal law, businesses are allowed to offer a discount to their customers or another incentive for using a certain method of payment, as long as that incentive is offered to all customers and the offer is disclosed clearly and conspicuously. For example, a business can offer its customers a discount, as an incentive for paying with cash or check, rather than a credit card.
For many years, gas stations, government agencies and utility companies have taken advantage of a similar type of programme and now, with the backing of Visa, Mastercard and all major card brands, we are able to bring this unique offering to you.
What is a cash discount program?
A cash discount is when a merchant decreases the price for cash purchases as an incentive and to encourage customers to pay by alternative methods other than a credit/debit card. Such alternative methods include cash or checks in order to receive a discount which is applied at the time of sale. Cash discount programs are not credit card surcharges because they do not charge a fee that is added to a credit card transaction.
A small convenience fee of (4%) is applied to all sales. This fee is waived as a discount if the customer selects to pay by cash or check. OrangePay increases profits for businesses by eliminating all of your processing fees and increasing cash revenues.
What is the difference between the cash discount program and surcharge fees?
A surcharge is a charge or fee that is added towards the price of a good or service and is usually added towards an existing tax. Surcharges, however, cannot be assessed on debit cards. Typically, surcharges are based on a specific percentage of the total price of goods or services before taxes are assessed.
Is a store obligated to notify its customers about the program?
To implement the cash discount program, a merchant is required to provide notification, for example a note by the register at the checkout point advising that there is a service fee applied to all sales and a discount given if a cash payment is made.
Sample Cash Discount Sign:
Cash discount programs must present a clear receipt detailing the convenience fee or cash discount amount.
Sample Cash Discount Receipt:
Service fees are collected from the customer by the technology provider who then pays the credit card charges on behalf of the merchant, removing the need for any back-end accounting or complex statements. The only important thing for the merchant is that they are able to eliminate 100% of their processing fees.
You may be worried that customers would be put off by having to pay this extra processing fee. However, in a recent study done by Payment Journal, 99.2% of customers did not complain about the extra fee. And even if they did, then they would still be able to pay with cash.
Why choose OrangePay over other zero fee processors?
• Eliminate 100% of merchant processing fees
• Available in all 50 states
• EMV supported Credit Card Machines with pin pads
• We fully integrate with Restaurant / Retail POS solutions
• Next day funding
• Terminal placement programs
• 24 /7 Technical Support
• Unmatched Customer Service
