Zero Processing Fees: Let Customers Select Debit vs. Credit

Small business owners know, all too well, that every dollar and cent matters for your bottom line and profitability. It’s long been accepted that credit card payment processing fees were a necessary evil when doing business if you want to provide customers with the convenience of using credit cards. However, new rules allow businesses the ability to pass along credit card payment processing fees to consumers.

What is Zero Fee Processing?

As the name implies, “zero fee” processing is a tool by which you can process credit card payments without paying the processing costs. Instead of paying them yourself, your business passes along those fees to your customers.

The process that allows this to happen is often referred to as “surcharging.” When a customer uses a credit card, they also agree to pay the fee. Once the customer swipes their card, the terminal will notify them of the fee and give them a chance to accept or use a different form of payment. When the customer covers the fee, you get 100% of the sale—it’s that easy.

Many industries have found success with zero fee processing and continue to give their customers the option to decide which card payment is most convenient, including:

  • Gas stations
  • Government
  • Utilities
  • Schools and colleges
  • Cell phone carriers
  • Healthcare
  • Non-profits

Is It REALLY Free?

In the majority of states that allow zero fee credit card processing, you get to keep 100% of your credit card transactions with zero processing fees, while still providing your consumers the option to choose debit for a no-fee payment option.

As a business, you’re still responsible for debit card fees, even those related directly to the processing. Though, if your business processes numerous credit card transactions each month, it may be worth considering.

How to Surcharge?

If you’re interested in surcharging for your business, consider a few words of wisdom to assist you in your efforts and provide excellent customer service.

  • Double check that your business is located in a state that allows surcharging. So far, the list is relatively small, but the following states do not allow surcharging: Texas, Florida, New York, Colorado, Connecticut, Oklahoma, Kansas, Florida, Maine, and Massachusetts.
  • Return processing fees when refunding your customers.
  • Make sure your processor is fully compliant with the regulations outlined in the new Dodd-Frank Act.
  • Find a processor whose system and software handles the surcharging for you, so you can focus on providing customers with a positive experience.
  • Work with your processor to program your terminal to list surcharges as a separate line item on receipts, as well as ensure that only credit transactions are surcharged, and for the appropriate amount.
  • Your processor will generally handle informing the credit card companies of your intent to surcharge, but you will need to obtain and display appropriate signage stating that your business surcharges in order to be compliant.

Surcharging can save your business a lot of money if you process many credit card orders in the average month. Consider whether it’s the right choice for your business and work with a partner who will help you create transparent buying solutions for your business and your customers at every turn.

With BankCard’s zero fee processing, your customers will have the power to select which card option is more convenient or beneficial to them. BankCard Services believes in offering ethical, open, and transparent payment processing with flexible terms and FREE payment processing equipment on a month-to-month basis, no long-term commitment needed. Contact us today to discuss your needs.

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