Merchant Cash Discount and entailing FAQ’s
Cash discounting program is a superb method for merchants to eliminate the cost of processing. According to Merchant Cash Discount, merchants levy a service fee on all the commodities. This service fee is discounted for the customers who pay via cash.
This implies that:
- The customers using cash for transactions are not liable to pay the additional charge.
- People paying via other modes will find a detailed description in their receipts about the customer service charge deductions.
In case, a merchant wishes to apply cash discount in the receipts; then the following steps have to be followed.
- Prior information has to be sent out to customers, displaying the deduction of extra charges on transactions via payment methods other than cash.
- There should be signage displayed to alert the customers regarding the same.
- Merchants need to upgrade their terminal application, to deduct the appropriate service charge on the transactions.
There are many firms providing cash discount programs to the merchants. But, Swype Fast is one of the best options to consider while talking about Merchant Cash Discount. It helps in eliminating the expense of processing fee paid by the merchants on the application of their exclusive merchant cash discount program.
They aim to provide a customer service quickly without any difficulties. It is benefitting the merchants by helping them collect the total of their revenue. This revenue can be used to compensate the processing fee.
In numeric terms, the merchants can save 95% of the expense of processing fee on an average. The calculation is done by the processing volume of credit card per month multiplied by an average of 3.00%. Thus, this is benefitting a firm and merchants altogether in a chain along with people paying with cash by discounting them the additional fee.
FAQ’s about the Merchant Cash Discount Program
Let us read some of the frequently asked question entailing the concept of cash discount program.
Is Merchant Cash Discount Program legal in its real sense?
Talking about Merchant Cash Discount program, this concept is legal in 50 states as of now. According to Dodd-Frank Act, there is a strict prohibition on card network payments that inhibits the power to render a discount on transaction done via cash, debit card, credit card, cheque, etc.
Is the Merchant Cash Discount program new to the system?
Not really. Since the old business years, firms have been offering a handsome cash discount to people transacting significant amounts using cash resource. So, this concept is just an elaborated and upgraded version of what has been followed as a business practice for quite many years.
Is this synonymous with surcharging?
Merchant Cash Discount Program is not related to surcharging in any manner. Offering cash discount to people using cash as a source of a transaction is very different from surcharging concerning brands’ card network regulations.
Surcharging is permitted by card regulations and associations under a set of parameters. But, business makers are not allowed to price their commodities or render discounts on the same under surcharging, whereas the concept of cash discounting is flexible in its operation as per the merchants.
Will merchant cash discount program completely cut off the monthly processing fee expenses?
Indeed it will. Merchants will be noticing the changes in the bill and addition of small fees due to the interchanging variations in the prices. But, according to the studies, a dramatic reduction in the expense of processing fee will be much noticeable by each vendor. The revenue generated using this concept will aid to the processing bills and portray 95 to 100% of the reduction in the processing fee as well. Thus, this concept will show near zero expenses of processing.
Will the customers feel disappointed for paying this fee on every purchase using modes of payment other than cash? Won’t this affect the sales?
It is not likely to happen as per the experience of many other business makers using this concept in their business. The use of cash comes along with extra work of visiting ATM for withdrawing money. Plus, the additive cost of making transaction is not worth deduction from the balances of a commoner.
Thus, a customer won’t mind much paying a bit of extra using card. Deducting 4% is just a minimal fee on an individual transaction that may not pose a severe impact to the long purchasing bills of a customer.
But, this small fee can make a merchant earn much to recover the cost of regulating the terminal applications. Considering the concept from a different aspect, the merchant cash discount program is created to maintain the standard quality of commodities and services without actually giving a hike to the price of the offering.
Increasing the price of the product or service may affect the overall purchase of customer, but cash discounting will probably not. Thus, customers won’t mind adding a few bucks extra to their receipts, and they will stick to you for long.
How to efficiently formulate this program and keep up with its applications for prospering results in business?
To efficiently use a merchant cash discount concept, one does not need to change the pricing of their offering in any manner. What needs to be done is posting signage to brief your customers about the levy of extra service charge on the use of payment modes other than cash.
Customers have to be informed about the 3.5% of additional charge in their receipts on all transactions. Also, it will be overwhelming for a customer even to know that paying using cash will help them save the customer service fee and get a merchant cash discount on the same on all transactions. The offered prices will be the only cash bill to be paid.
Buyers using credit cards as a source of payments will have to register their customer service charge at the terminal application counter. The service charge will be directly programmed to the terminal, and no further process has to be followed. It is a smooth and hectic free process for customers as well as merchants.
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