The Cash Discount or Surcharging program helps merchants to stop paying credit card fees by shifting it to the customers who pay with their credit and debit cards. Customers have the option to pay with their card of choice and pay a small fee or they can pay with cash and the fee will be waived.
Merchants that sign up for the Cash Discount or Surcharging program will have their POS payment terminals programmed with a 4% surcharge on top of the original price when people pay with their cards.
The merchant runs the card for a $100 sale. The cardholder is then charged a total of $104.
If we take 3.84% of the transaction out then the business owner pays $4.00 in fees on the $104 sale.
$104 * 3.84% = $4
$104 – $4 = $100 deposit.
This ends up being a 4% charge on the original $100 sale. The business owner is charging 4% to the client and exactly 4% is being paid to offset by the 3.84% processing charge.
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