In the past few years, merchants trying to relieve costs associated with credit card processing, and brokers attempting to capture these merchants, started to offer a 0% fee program. When discussed, everyone called this “cash discounting” in the industry, although it was really a surcharge for the use of a credit card. The hard part was that we were told we were to market this as cash-discounting, creating further confusion for us and our merchants.

Fast-forward to mid-March of 2023, when attending Northeast Acquirer’s Association’s annual conference, Jeff Fortney gave the presentation Surcharging, Past, Present and Future where he discussed the current state of Surcharging (what we’ve been told to market as Cash Discounting), actual Cash Discounting, and what merchants will face as they go forward using these programs.

Let’s talk a little bit about surcharging and cash discounting so it makes a little sense.


Surcharging is what you see when you walk into a store, restaurant, etc. and see the sign “There will be a 3.99% fee for credit card transactions”. If you’re current merchant services provider is marketing this to you in any form of a cash discount method, they are wrong… pure and simple.

As a side-note, Visa changed the ruling this year for their branded cards to reduce the fees able to be charged from 3.99% to approximately 2.99%. As a part of this, certain card types (such as debit cards) cannot be surcharged. As of the publication of this article, Fortney informed us that 25 of our colleages have been hit by this violation of terms from Visa. Most of the time, this fine will be passed on to the merchant.

For merchants that are saying that surcharging is there to save them money, this can really hurt as, according to Fortney, these fines can start at $30,000 per-incident; and there is no ability for recourse.

If you conduct business in Connecticut or Massachusetts… we hate to inform you, but surcharging is not allowed.

Cash Discounting

Actual Cash Discounting works by the merchant advertizing their base price (e.g. $20.00 for that pizza) and subsequently, should you pay cash, they may charge you $19.50 or $19.00, which is the difference in fees for the card transaction. Merchants are free to charge whatever they feel is valuable to them, so long as the “cash discount” price is lower than the advertized price.

This difference in price is the offset the merchant will use to conduct business. [To the best of our knowledge], there is nothing we need to do in order to enable our merchants to employ cash discounting at this time.

Oh, and for those in Connecticut and Massacheusettes, you may participate in cash discounting!

In short, you have three options:

  1. Keep your current “traditional” merchant processing account.
  2. Employ cash-discounting in your business.
  3. Determine if a surcharge program is right for you.

No matter your choice, please contact us so we can work with you to ensure your payment processing account has the features you need to process card transactions.