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Surcharging: Credit Card Rates at 0%

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Tired of paying for all of your customer’s credit card rewards?  Many businesses are but there is a new solution called Credit Card Surcharge.  This solution allows a business (especially startups) to take control and reduce these expenses to almost $0. Surcharging allows you to pass the interchange cost (usually paid by the business) of the credit card transaction through to customers, eliminating credit card processing rates altogether.  Our surcharging platform is available for all processing environments, whether, retail, moto (mail order/telephone order), or internet/e-commerce.

Business owners have been complaining about the cost of credit card acceptance forever, and they usually blame their processor for the exorbitant fees.  Most merchants do not realize that it’s not the processor setting the cost of the various credit cards out there, it’s the Card Brands. (Visa/MasterCard/Discover/American Express) and these rates can be found on each Card Brands publicly published Interchange Charts.

Well they were heard, and the solution offered is to allow you to now pass these credit card fees on to your customers via Surcharging.  Surcharging is available on credit card transactions only.  Surcharging is not applied to Debit Cards.  There are additional rules and surcharging is not available in Colorado, Connecticut, Maine, and Massachusetts, nor is it currently supported in Puerto Rico or Canada.

As we advance towards a non-cash future, credit cards provide a life line as payment acceptance for all businesses.  Credit Card Surcharge allows you to offer customers the flexibility to pay by credit card for a relatively small fee. The fee typically ranges from 3% to 4% of the purchase price – usually just a few cents on the dollar. Card holders who wish to avoid the surcharge can pay using a lower cost payment method such as a debit card, check or cash.  Many businesses fear that if they impose credit card surcharging and pass these fees on to their customers, they might lose the customer.  Have no fear.  For customers who do not want to accept the surcharging fee, they have the option to pay via any of these means acceptable at your place of business, Debit Card, Cash, Check, ACH, or bank wire.

Generally, there are 2 different Surcharging Plans, Merchant Managed and Acquirer Managed.  With the merchant managed plan, the merchant will be funded for all monies collected for the sale, including the surcharged amount.  At the end of the billing cycle, the merchant will be debited for all surcharge fees plus any additional fees due to the processor.  With the Acquire managed plan, the processor holds back the surcharge fees and only deposits the actual sale amount into the bank account.

It takes an expert to navigate the legalities of surcharging and ensuring you are adhering to the rules applicable in your state.  There are pros and cons to this solution as and many other ways to optimize your payment processing flows for further savings.

Should you wish to speak to one of our payment experts about surcharging or any other pain points in your payment processing flow, feel free to contact us.

Mark Fravel is Founder and CEO of National Transaction Corporation.  For more information, please visit https://www.markfravel.com.

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