The term “zero-fee” refers to a processing method in which businesses can accept credit card payments without incurring processing fees. Instead of your company paying the credit card processing fee, the customer does. The fees vary by processor, but they cannot exceed 4%. When a customer swipes their card, the terminal notifies them of the fee and gives them the option to accept or use a different payment method. It’s that simple: when the customer pays the fee, you get 100% of the sale.
As a retailer, “zero-fee” processing results in significant cost savings associated with credit card processing. If you pass your processing fees on to customers, it’s known as surcharging credit cards, and it’s already an option you can choose regardless of your credit card processor. Surcharging is legal in all but nine states in the United States, as long as certain conditions are met.
Many industries, from gas stations and cell phone carriers to healthcare and nonprofits, have found success with zero-fee processing and continue to provide their customers with the option to choose which card payment is most convenient. Xcceptexperts can guide you in the right direction.
Benefits of Zero Cost Credit Card Processing
There are numerous advantages to using zero cost credit card processing for your company. For one thing, it can help you avoid paying exorbitant monthly fees for your merchant account services. Furthermore, if you’re short on cash, having no credit card processing fees allows you to reinvest more of your profits back into your business. Furthermore, you have the freedom to tailor the pricing of your product or service to your specific requirements.
Furthermore, it may provide more security than other options because it ensures that all sensitive information stays with the provider rather than being stored elsewhere, such as in-house servers or mobile devices. Many business owners use no-cost credit card processing to prevent fraud and avoid liability for invalid charges.
Many companies also do not require a long-term contract, equipment fees, or any upfront costs, making it simple to get started.
Considerations before you Accept Zero Cost Credit Card Processing
Surcharging programs can pass on the cost of transaction processing to your customers, but you’ll still have to pay fees, including a slew of recurring and incidental merchant account fees. Furthermore, you may be charged an additional monthly fee for adding surcharges to your card.
Examine carefully to ensure that the cost is not higher than it would have been without the surcharge program. Implementing a no-cost credit card processing program, for example, works best for businesses with a high credit card monthly volume. Charging, on the other hand, may not make sense if your company rarely accepts credit cards.
You must provide adequate notice to credit card users if you intend to surcharge them. The main disadvantage is that this will result in lost website or store sales once your customers realize their purchase will be subject to additional fees. Make sure your company has a strategy in place to attract and retain customers when they are expected to pay 3-4% more at your establishment.
Before you accept surcharge credit card processing, look at what your competitors are doing. If they aren’t, you’ll be at a competitive disadvantage, resulting in less profit than if you chose to bear the processing fees yourself. Customers can now obtain goods and services more easily than ever before thanks to the Internet, so consider this when deciding whether to implement a no-cost credit card processing program.
Surcharges can only be applied to credit card transactions, so customers may prefer to use their debit card or pay with cash instead, which may result in lower overall processing costs. Even so, you won’t be able to eliminate fees because many consumers use credit card reward programs while others never carry cash. These surcharges will most likely discourage these customers from ever shopping at your store.
Consider the benefits and drawbacks of a no-fee processing program before deciding. Of course, you’ll want to weigh credit card savings against lost sales or irritated customers, but ultimately, the only way to know is to try it. When you are ready the experts at Xccept.com will be happy to assist in answering all your questions or get started.
