How Zero-Cost Processing Benefits Your Business
Zero-cost processing is a program that doesn't charge the business for all of the transactions that are accepted through the pos system. As credit card processing fees can eat into an enterprise's bottom line, many small businesses now choose to work with credit card processors that offer zero-fee options.
It would be inaccurate to deny the fact that there are costs associated with processing credit card transactions (interchange fees, monthly fees and chargeback fees to name a few), but with zero-fee programs these costs are absorbed by the cardholder through what’s known as a surcharging. Customers will have a choice to pay with a credit card at a slightly higher price (known as a surcharge) or pay with cash at the original price.
Similarly, merchants can implement a cash discount program, where customers receive a discount on their purchases if they pay with cash, while paying the original price when using a card. While these two methods of zero-cost processing sound similar, there are some key differences worth noting.
Fees for debit card payments may be eliminated depending on if you’re using a surcharge or cash discount program. Cash discounts will eliminate processing fees for debit payments, but surcharges will not.
Reduce Exposure to Credit Card Payment Processing Fees
When you use zero-cost credit card processing, your customers pay your processing fees - this helps lower your costs.
Receive Original Prices for Products and Services
When your business pays for merchant account expenses, it leaves itself exposed to a mixed bag of fees and costs. This can make it difficult to price your products and services accurately. However, with this program, you will always know the exact price you're receiving for a specific good or service.
Encourage Cash Payments from Customers
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