Credit card processing fees can be expensive. Have you ever wondered “Can I encourage a customer to pay in cash by offering a discount for cash?” or maybe “Can I add a surcharge if a customer pays with a card?” Visa has updated the Visa Core Rules and Visa Product and Service Rules, and these changes are in your favor! You can offer a discount for cash to incentivize your customers to pay in a way where you aren’t paying processing fees. You can do this by applying a convenience fee to all transactions and then discounting it only if your customers pay with cash. You cannot, however, directly add a surcharge to your card paying customers. Below are excerpts from the rules that make this possible.
220.127.116.11 Discount Offer – US Region and US Territories
In the US Region and a US Territory, a Merchant may request or encourage a Cardholder to use a means of payment other than a Visa Card or a Visa Card of a different product type (e.g., Visa Classic Card, Visa Traditional Rewards Card, Visa Signature Card) than the Visa Card the consumer initially presents. Except where prohibited by applicable laws or regulations, the Merchant may do so by methods that include, but are not limited to:
Offering the consumer an immediate discount from the Merchant’s list, stated, or standard price, a rebate, a free or discounted product or service, or any other incentive or benefit if the consumer uses a particular general purpose payment card with an acceptance brand other than a Visa Card or other particular means of payment
What this means for you: With the proper signage as established out in 18.104.22.168 US Credit Card Surcharge Disclosure Requirements – US Region and US Territories, you can offer a discount for cash, so your customers pay processing fees for that transaction.
22.214.171.124 Convenience Fees – AP, CEMEA, and US Regions
In the AP Region, CEMEA Region (Russia), and US Region, a Merchant that charges a Convenience Fee must ensure that the fee is assessed as follows:
Applicable to all forms of payment accepted in the payment channel
What this means for you: Along with following some other requirements, you are able to add a convenience fee to your customers’ transactions as long as it is all transactions. You are then able to offer an immediate discount if they pay with cash.
A Merchant must not add any amount over the advertised or normal price to a Transaction, unless applicable laws or regulations expressly require that a Merchant be permitted to impose a surcharge.
What this means for you: While you may not able to add surcharges to credit card transactions in all states, you can pass a convenience fee or service charge fee on to consumers that choose to pay with card, provided you offer a discount for cash payment as an alternative. To support this, you will have to add a service charge fee to all transactions, and then apply a discount to cash-paying customers of an amount equal to the amount of the service charge fee.
Visa has changed their rules. Luckily, they work for you! These new regulations allow you to easily add value and reduce fees, improving your business, so you can focus on why you started it in the first place. See the solutions that FlatRatePay™ offers to learn more about how they can help you.