Surcharging refers to the practice of adding a small fee or surcharge to a customer’s transaction when they choose to pay with a credit card. Merchants get the lowest fees for credit card processing by passing on the costs associated with processing that particular payment method.
Benefits of zero-fee processing (through surcharging):
- Cost recovery: Surcharging offers a means to recover credit card acceptance costs.
- Competitive pricing: Surcharging lets business owners offer competitive pricing to customers who choose to pay with alternative methods, such as cash or debit card transactions.
- Financial flexibility: Businesses can gain the financial flexibility to allocate funds towards business expansion, enhance products or services, or improve customer experience.
- Payment method diversification: Surcharging incentivizes customers to explore alternative payment methods, such as cash or debit cards, which do not incur high fees.
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