Zero Fee Credit Card Processing

What is “no fee” credit card processing?

“No fee” credit card processing, free credit card processing, zero cost credit card processing – no matter what you or the merchant services provider call it, these terms describe the practice of passing total or partial credit card processing fees onto customers.

Example: Instead of Hometown Coffee Shop paying for credit card processing on every mocha latte purchased with a credit card, the Shop implements a charge so that the customer is paying or covering that fee – not Hometown Coffee Shop. 

How does “no fee” credit card processing work? 

There are a few ways that business and merchant service providers work together to pass the buck onto the customer, which includes adding a surcharge, a convenience fee or offering a cash payment discount. Note that many of these methods require close attention to state-level regulations and rules imposed by individual credit card companies.

At the end of the day, when it comes to “no fee” credit card processing, someone is paying the fee – it’s just a matter of whether it’s the business or the customer.

Benefits of “no fee” credit card processing

The main benefit as the business owner is that those fees aren’t coming out of your register so you’ll save between 1.5%-4% on every credit card transaction.

Risks of “no fee” credit card processing

The biggest downside is that some of your customers won’t be thrilled about paying extra for the convenience of using a credit card, which could result in some lost business. Additionally, the rules and regulations around surcharges and convenience fees can be difficult to navigate: laws vary from state to state and each credit card company has different rules and requirements.