SalesHEAD Guide to Reducing Credit Card Processing Costs


Guide to Credit Card Processing

Start Saving Money Today!

It’s the beginning of the month again and time for that dreaded credit card statement to arrive.

Opening the statement is kind of like getting a kick in the pants! We cringe when we see how much money has literally been taken from our pockets. And who can understand the statement anyway?

Believe me, you are not alone, credit card processors have hundreds of ways of disguising costs and keeping customers like you from ever figuring out how to save money.

Since accepting card payments is a must for most businesses, we believe that education is the key to making more informed decisions, and in turn, saving money for your business.  In this article, we will shed light on how the card processing industry works, who the players are that are reaching into your pockets  and how the method in which you accept card payments impacts your costs.  We will also dissect the various pricing structures utilized in the industry, define some of the key terms you may see as well as explain how the various cards in your customer’s wallets also affect your costs each month. 

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zero COST Processing has Arrived!


For the past few years, merchant processing companies have been super busy creating and launching programs that enable business owners to accept card payments cost free. We know, it sounds too good to be true but for business owners ready to end the madness of spending hundreds or even thousands of dollars each month in processing fees, your time has arrived!


Before you fall out of your chair, let’s dig a little deeper into these programs so you can decide if it is right for your business. Below, we explain the “no cost” program, how it works and what you should look for when selecting a processing provider.

What is “No Cost” Processing?

You will here different terminology from the various payment providers in the market today when talking about these programs. The most common terms are ‘Cash Discount’ and ‘Surcharge’ Programs. At it’s essence, all of these programs do the same thing, transfer the cost of payment acceptance from the business owner to the customer. And why not? Many of us remember the days when buying gas had both a Cash and a Credit price, right? Well, this is the same concept, use Cash and Save!

As business owners, we have all heard it a thousand times. The customer pulls out a card and then suddenly says, “Oh, use this card instead so I can get my points”! Although we as business owners are crystal clear, the customer simply doesn’t understand that they are taking an additional 1/2 to 1% right out of the owner’s pocket!

Why should we continue to pay for our customers rewards program?


Now that we have talked about why surcharge programs are on the rise in the payments industry, let’s look at how they work.

With a surcharge/cash discount program, the merchant is agreeing to be charged a flat percentage rate for every card transaction. On average, the flat percentage rate charged to the merchant is 3.5% but could also be as high as 4.0%.

In order to recover the cost, the terminal will be programmed to automatically add the surcharge to the customers ticket, usually at the same rate charged to the merchant, in this case 3.5%.

For example, the merchant sells a $ 100 product or service and the customer uses his/her credit card for payment.

Product/Service Cost = $ 100.00

Surcharge % Rate = 3.5% or $ 3.50

Total Charge to Customer = 103.50 ($ 100 + $ 3.50 surcharge)

In this example, the merchant/business owner has agreed to pay the processing company 3.5% and in turn is adding the surcharge of 3.5% to the customers ticket, thus recovering the cost.


As of the day of this writing, Surcharge/Cash Discount Programs are priced as “flat rate”, meaning the merchant is charged a flat percentage rate for every card payment transaction that occurs. On average, the flat rate percentage charged to the merchant is 3.5% but could also be higher.

With these programs, the merchant will then charge the customer

Other monthly fees may apply such as Statement Fee, Program Fee, Transaction Fee, etc. so make sure you understand what additional fees are involved before signing any merchant agreement.

  • Contract Term

Be very careful here. Merchant processing providers have long been known for failing to disclose the agreement term, leaving business owners with hefty early termination charges when trying to cancel down the road.

Look for a provider who offers a month to month agreement option and make sure that the paperwork states that there will be no early termination or contract cancellation costs if and when you decide to cancel the agreement. Do NOT take the salesperson’s word for it, make sure it’s in the Agreement!

Finding the Right Payment Solution for Your Online Business

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For business owners thinking of starting an online business, the world of eCommerce has changed a lot in the past few years. Our eCommerce Guide can help you understand the key players and help turn your great ideas into successful online businesses by providing practical information about how online payment processing works and the options available to you.

Check out our eCommerce Guide!

Restaurant Success in 2018


The biggest Restaurant Challenges of 2018 according to a Toast (POS System) study are as follows: 

  1. Hiring, Training and Re-Training Staff

  2. Optimizing Speed & Efficiency

  3. Attracting and Retaining Customers

Despite time being a major challenge for restaurant owners, it is important that you put effort into each of these three challenges, as a failure in one can negatively impact any gains made from the others.

For example, let's say you invest resources into Attracting and Retaining Customers and Retraining your Staff yet fail to Optimize Speed and Efficiency in the kitchen.  The result, more customers come in to your restaurant but find that food service is either slow or inconsistent, so they do not return.

Are you experiencing any of the same challenges at your restaurant?  What other challenges are keeping your business from reaching it's full potential?  Please share your thoughts, ideas and comments and let's help one another find more success in the back half of 2018!

See Full TOAST Report