If you've been researching ways to reduce or eliminate credit card processing fees, you've probably run into two terms: cash discount program and surcharge program. They sound similar, but they work differently – and they have different legal implications. Here's a plain-English breakdown for Pennsylvania business owners.
Credit Card Surcharging
A surcharge is an additional fee charged to customers who pay with a credit card, on top of your regular posted price.
Example: Your price is $100, and a customer paying with a Visa credit card pays $102.50 (a 2.5% surcharge).
Key facts about surcharging:
Cash Discount Program
A cash discount program works differently. Instead of adding a fee for card use, you post a single price that already includes a small service fee – and you offer a discount to customers who pay with cash.
Example: Your price is $100, and a customer paying cash pays $97.50 (a 2.5% discount).
Key facts about cash discount:
Which Should You Choose?
For most small businesses in the Philadelphia area, Chester County, and the Main Line, cash discount programs are the better choice. They're simpler to implement, have fewer compliance requirements, and are accepted more broadly by card networks. Custom Payments recommends cash discount programs as the lower-risk option for most businesses.
Ready to Explore Your Options?
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