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What is difference between Surcharging, Cash Discounting and Dual Pricing? And why are merchants choosing one of these pricing methods in regards to credit card processing?
Surcharging has been around a while. Visa/MasterCard allow certain merchants to add fees on top of their prices so as to pass the fees onto the merchant. This is only allowed when the merchant has multiple methods of payments and the one that is the most convenient is allowed to add surcharging for that convenience for clients. For example, your electric bill can be paid in person for the exact amount, but if you want to pay online, which is more convenient, then the electric company is allowed to add a surcharge. Surcharging needs to be registered with Visa and MasterCard.
Cash Discounting allows the merchant to post that all prices are cash prices. Other tender has a custom fee added. Usually, the fee is added at the credit card terminal and generally runs 4%. The merchant is required to post a sign explaining cash discounting and the client is notified of the fee on the credit card terminal and receipt.
Dual Pricing is a more transparent way of doing cash discounting. The receipt from the POS system lists the cash price and the price with a custom fee added next to each item purchased. See below: This is most transparent for the client.
As a result, many merchants are quick to adopt dual pricing as their preferred method of using cash discounting and adding a custom fee to cover their credit card processing costs. Living in this age of inflation and post Covid when busineses struggled, most consumers are understanding and willing to support their favorite establishments with the custom fee when they use the convenience of paying with credit cards.
Give us a call 505-296-2847 if you want to add Dual Pricing to your credit card terminal. We also have a white-label point-of-sale system that allows us to integrate Dual Pricing into the whole point-of-sale system.
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