Surcharge vs. Cash Discount Program – What’s The Difference?

credit card processing has become more expensive for traders, especially small businesses that have a tight budget and may not bring a lot of income such as their larger competitors. By accepting credit cards, businesses face the financial burden of interchange fees, if it is not recognized as a swipe fee. On average, the cost ranges from 1-4% friction and overtime, can significantly alter the profit into a loss for small businesses.

As a result, many small businesses are looking for solutions to keep receiving cards, but avoid monthly interchange fees. An answer to this dilemma be resolved in the recently formulated a cash discount program, which federal authorities in all 50 states in 2011. However, there has been some confusion as to what program and how the cash discount varies from additional costs.

Let us discuss what is the main difference between the surcharge and a cash discount programs, how to apply the cash discount law program and successful, and what traders should consider when evaluating providers of cash discounts.

What it Surcharge?

 A surcharge1 is the cost or charge added to the price of goods or services and usually added to the existing tax. 40 states in the US allow an extra fee for customers who pay by credit card. The remaining countries which prohibit additional costs California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas. Additional costs, however, can not be judged on a debit card.

They added just for the privilege of using a credit card. Typically, the additional cost is based on a certain percentage of the total price of the goods or services before tax was assessed.

What is a Cash Discount Program?

A cash discount occurs when traders reduce prices for cash purchases and offer an alternative to the merchant credit card processing. Cash credit card discount program no additional costs because they do not charge a fee added to credit card transactions.

There is a lot of confusion around the program discount for cash in the past, as people tend to associate them with the program an additional cost.

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nazmul Joined: September 9th, 2019