Merchant fees can be turned from an expense into a profit. Here discuss we how.

Your first question is most likely, “How can I possibly grow my business using monthly credit card processing fees that eat into my profit?” The answer is simple… by eliminating them.

Traditionally, business owners have been stuck paying high processing fees while their customers earn points, rewards or miles. In addition, processing fees have gone up as more customers are choosing to use their debit cards over cash.

Having been in the payment solutions industry for 20 years, I know how business owners are constantly bombarded with promises of lower fees and better rates, and you just don’t know who or what to believe.

If you take away one thing from this article, let it be this: there is now a legally vetted processing program that is fast becoming a game changer for business owners across the country. Under this program, customers have the option of using a credit card and paying a service fee or paying in cash and receiving a discount. Either way, the business eliminates its monthly processing fees and enjoys the benefits of increased revenue and cash flow.

The card brands Visa, MasterCard, Discover and American Express have always protected use of their cards and imposed strict requirements on businesses. For example, they fought against businesses requiring credit card minimums and charging more when a customer paid by credit card. But, once a legislative amendment removed these barriers, Cash Discounting was born.

So, let’s talk about Cash Discounting and how this program can help your business. The premise is simple – the program provides payment options for customers while permanently eliminating your monthly credit card processing fees.

  • Customers who pay with cash will pay the posted price.
  • Conversely, customers who decide to pay with a credit card will pay a small service fee above and beyond the posted pricing. Thus, the name Cash Discounting, as customers essentially receive a discount when paying with cash versus a credit card.

Business owners benefit either way and will most likely see an increase in cash payments.

All too often, I’m finding that business owners haven’t even been made aware of this program by their current agent. I take the position that it’s my responsibility to ensure the businesses I work with are fully up-to-speed about all programs that can benefit their bottom line, and then they decide if they want to take advantage of it. The beauty of this program is that it works with card present and card not present businesses.

Some business owners start using the program immediately upon learning about it and are thrilled with their increased revenue and cash flow, especially in today’s tough economic times. For others, there is trepidation and concern… “How will my customers react,” “Will I lose any business,” and “Can’t I just raise my pricing?”

I fully understand a business owners’ hesitation and reluctance and it’s essential to evaluate this program specific to how it could help your individual business. Below are some examples of current clients who have adopted this program and are reaping the benefits:

Restaurant – Saving $4,500 – $5,000 in monthly processing fees ($60,000 annually)

Gave their customers 30 days’ notice of the new program and have not skipped a beat as their business continues to flourish with little to no pushback. The cash buffer they built as a result of these savings kept them in business during COVID-19 required shutdowns.

Auto Repair – Saving $400 – $600 in monthly processing fees ($7,200 annually)

The business saves hundreds of dollars each month and has been able to discount their services. The business owner has stated “this has been an extremely lucrative business decision for us.” Customers who don’t want to pay the service fee pay in cash. A win-win situation.

Frame Store – Saving $500 – $800 in monthly processing fees ($9,600 annually)

The business owner was padding pricing by 3% to help cover processing costs. Now, pricing has gone down, and the business owner is being transparent with her customers. The bank actually called the business to question why their cash deposits had increased so significantly.

In addressing some of the other concerns,

  • Cash Discounting is legally vetted in all 50 states and approved by the card brands
  • The monthly savings generated more than covers any lost profit in sales
  • Businesses are in violation of card brand rules when they charge customers a higher random % when paying with a credit card
  • Raising pricing just makes the cost of goods and services higher and the business ends up paying even higher processing fees

Cash Discounting continues to grow in popularity as business owners see the benefits of the increased cash flow. I would love to see how this program can help you and your business.

Thank you Adam Moss at Clarity EPS, one of our solution partners, for his contribution and explanation of this recent expense reduction solution. Adam can be contacted via: [email protected] or (561) 338-4446 / ProcessCreditCards4Free.

Published by Marc Freedman

Marc Freedman, CEO, Expense to Profits

Marc Freedman


Marc currently serves as our Chief Cost Evaluator, expertly advising our client management team on how to help you successfully achieve your business and financial growth goals. A respected mentor to all he consults with, he is an avid collaborator and contributor to the spend consultant community, guiding thought leaders to formulate, design, and install the best operational solutions available to their clients.