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The Future of Cash Discounting (Omnichannel, Processor Agnostic)
Cash discounting is here to stay. It makes sense – businesses hard-hit by changing customer habits brought on by the coronavirus are scrambling for new ways to save money, […]
Cash discounting is here to stay. It makes sense – businesses hard-hit by changing customer habits brought on by the coronavirus are scrambling for new ways to save money, and cash discounting delivers real savings. Not a few basis points that some other MLS can come along a promise to beat. With cash discounting those confusingly variable per-transaction fees get recouped with simple adjustments to the tickets of credit card paying customers.
We talk with many agents who see cash discounting as a fad that will disappear with time. It isn’t and it won’t, because merchants understand and are accustomed to passing along costs to customers, and credit card processing fees are a cost, just like inventory, Internet connectivity and salaries. A clothing store owner experiences increases in the cost of suits doesn’t just eat the additional cost, they pass it along to customers buying suits. That’s all they’re doing with cash discounting, passing along the cost of credit card processing to the party that benefits most from the card payment option.
Sure, store owners could recoup rising card processing costs by raising prices across the board. But why should cash-paying customers be asked to pay more to in effect subsidize customers who pay with credit cards? And why shouldn’t cash-paying customers get price breaks for using a less-expensive payment method?
The reasoning behind cash discounting resonates with business owners as well as with consumers. That’s why we’re seeing a wave of merchants ditching traditional card processing fee arrangements for cash discounting.
Consumers like using credit cards, but most understand businesses incur costs accepting credit cards. They also understand that many businesses, especially small business, are suffering financially because of mandated shut downs brought on by the coronavirus pandemic, and are doing what they can to help keep the doors open at struggling businesses. How many times have you ordered take-out hoping to help out a favorite restaurant suffering from mandated closures?
Providing Cash Discounting Choice
Everyone likes choice. And at Valor PayTech we’ve developed a cash discounting solution that allows merchant sales reps to offer clients choices. With our VL100 & VL110 terminals you can provide clients the ability to switch between traditional processing and cash discounting/surcharging with the ease of a simple screen command. The device support dual MIDs, allowing merchants to automatically switch from cash discounting/surcharging to traditional processing with standard fees on a transaction-by-transaction basis.
We also support eInvoicing, with payment requests sent via SMS. This allows for truly contactless transactions in support of social distancing objectives. It’s a great option MOTO businesses, as it saves time, speeds payments, and eliminates PCI compliance issues since card numbers never get handled by employees.
So, don’t sell cash discounting short. Merchants need and want cheaper ways to process payments. MLSs want to build profitable portfolios. Cash Discounting from Valor PayTech can help you deliver on both counts.
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