Things to Know About Passing on Credit Card Fees to Customers with Pay.cc
Implementing a surcharge on credit cards is a worrisome and challenging decision for people owning small businesses. The fear is valid as it could put off potential customers. Yet, it is necessary because of the cost attached to the credit card processing.
Thankfully few strategies are available that do not overwhelm the POS system and the fees are transferred to the customers while abiding by the laws of the government. Continue reading to know more about the implementation along with the advantages and disadvantages of supplementary fees for credit cards.
What are the Ways to Transfer Additional Levy of Credit Cards to Customers?
The credit card processing fee of credit cards can be passed on to the customers either directly or indirectly. For instance, the direct way involves the customers paying the total amount that is due on their credit card and your business pays nothing. On the other hand, passing the surcharge fee indirectly refers to utilizing other tactics to decrease the additional levy on credit cards by promoting other methods of payment, such as;
- Cash Discounts: Cash discounts are usually imposed on transactions made through debit cards due to the lowest processing cost. It can be an alternative to a surcharge fee. Therefore, customers will be motivated to make payments through cash or a debit card instead of a credit card.
- Convenience Fee: This involves imposing a surcharge fee on a few of the purchases made with the credit card. However, it won’t transfer the complete charges of processing of the credit card yet it will balance out the amount of other modes of payment.
- Lowest Amount of Purchase: This method allows you to set a minimal amount of purchase that will enable you to approve credit card transactions and reduce the total fees on it. This can be great if you do not want to impose a direct surcharge on the customers making purchases through their credit cards.
- The Surcharge Program: It is the direct way to impose the surcharge fee on the credit card. The surcharge program refers to charging a customer an additional levy on the purchases they through the credit card that would compensate the balance you’d have to pay to the payment processor. Hiring a payment service provider like Pay. cc can help you manage paperwork since this program requires you to follow the rules and regulations along with educating customers and networks about it.
What are the Advantages and Disadvantages of a Surcharge Program?
The surcharge program is transferring the additional fees on credit card transactions to the customers. The question arises if it is the right approach or not. Let’s dig in further while assessing its pros and cons.
- The advantages to the customers are that they can opt for the option of making payments through cash or debit card while ignoring the processing fee on credit cards. Secondly, credit card payments are approved as the credit card processing fee is borne by the customers without affecting your profits. This way the prices can be set comparatively lower for the customers.
- Disadvantages include the risk of losing customers if they are not bound to pay the fees somewhere else. But if other service providers in the vicinity have the processing fees as well then the risk can be mitigated. Yet the customers may not be happy paying for it altogether. Making it possible with the right awareness techniques, if the customers are aware of choosing to pay with cash or a debit card before the program is implemented, then this can be a positive aspect as a whole.
Businesses that have implemented service providers like Pay.cc as a middle way to charge the additional levy seem to be using it successfully.
Tactics to Transfer the Surcharge Fee to Customers
In the case of altering the principles of payment without upsetting the customers, a few guidelines have to be followed.
Firstly you have to be as authentic as possible and make no attempts to cover up the element of surcharge fee using jargon. To maintain a trustworthy relationship between you and your clients make sure that the credit card fees are mentioned on the customer’s receipt.
Secondly, customers should be given an open hand to choose between cash, debit cards, or credit cards. Customers may not be happy with the surcharge program whereas the debit card processing fees cannot be transferred to the customers.
Last but not least, make sure you abide by the rules of the state. For this purpose, you can take assistance from service providers such as Pay.cc to put a surcharge payment program into action.
A reliable service provider like Pay.cc would have an effective program designed for the supplementary fee for credit card transactions. In a nutshell, it manages transactions of the debit as well as the credit cards with no extra costs of setup or other account fees.