In this episode today I’m discussing the surcharge laws in the state of New York. How do they relate to cash discounting and fifty-state...
STOP End of Month Billing for Cash Discounting
Let’s continue digging deeper into understanding cash discounting. Welcome to the second episode in this series. In the first episode I compared surcharge and cash discounting. Due to specific regulations, I believe surcharge is dead. Now is the time to learn how to sell cash discounting. How to stop end-of-month billing is the topic […]
Let’s continue digging deeper into understanding cash discounting. Welcome to the second episode in this series. In the first episode I compared surcharge and cash discounting. Due to specific regulations, I believe surcharge is dead. Now is the time to learn how to sell cash discounting. How to stop end-of-month billing is the topic today. Choose the processor with the right method. And make clients happy with your service.
Wondering whether you are with the right company to sell cash discounting? Please go to CCSalesPro.com and click on “find processors.” Schedule a ten to fifteen-minute call with me. I can make a recommendation of a processor I trust who is doing cash discounting the right way.
Read Previous Article here: http://bit.ly/2kGhxyr Surcharging and Cash Discounting, What’s the Difference?
>I’d like to acquaint you with a faulty method being used by some processors. Merchants currently paying $300 a month in credit card processing fees on $10,000 in volume are being assured cash discounting would cut their rates by 80% or 90%. They should expect to pay $30 to $50 a month. Of course, merchants are glad to take advantage of such savings! However, most processors are either matching their rates or going higher. Processors are depositing all the money in the merchants’ bank accounts throughout the month. Then at the end of the month, the money is taken out.
Consider this example. A client ran a $100 transaction at the business using his/her credit card. For a merchant with 3% cash discount, $103 instead of $100 would be collected. Most processors are depositing the entire $103 into the merchant’s account. At the end of the month a big deduction of $400 is coming out of the account. The merchant did collect more revenue to offset that expense. But the statement looks like the merchant is paying $400 rather than the original $300 in fees. There are processors who get around this problem by doing a 3% daily discount. This pulls out the money but still shows large fees on the statement.
>True cash discounting. The processor has merchants sign the document allowing them to pay the swipe fees on the merchants’ behalf. When the consumer spends $100 on a card, the 3% discount makes it $103. True cash discounting means the processor uses that $3 to pay the money. It never goes into the merchant’s bank account. Then the statement shows total merchant fees at $50 or whatever the amount not covered. There will be information about cash discounting on the statement. But the amount of fees is the smaller amount. If your processor is using this method of true cash discounting, your clients will see you told the truth. You’ll have happy merchants. Make sure the processor is using this method.
>Why do the merchants pay anything? What is that $50? There are usually going to be some additional fees such as subscription fee or a lease of terminal. Also, some transactions may result in merchants being billed a bit more money to go above and beyond the 3% discount. This might be a rewards card. It’s never very much, but you don’t ever want to offer zero percent processing.
>In January we will offer the new version of instantquotetool.com. Then you will be able to see exactly to the penny how much fees will be. Watch for more information on the instantquotetool!
Hopefully this tip will help you. Please join me tomorrow for the third episode. Learn more about how to sell cash discounting.
Read the next article here: http://bit.ly/2mcgAP8 Leasing Terminals with Cash Discounting – Good or Bad?