The year 2020 is already poised to go down in history as one of the most unpredictable for businesses. Merchants and their customers are highly motivated to find ways to trim costs and boost savings. But businesses that are early adopters of credit card surcharging can bank on bottom line savings, with absolute certainty. For decades merchants and other businesses that accept credit cards have complained about excessive fees. Now it’s possible to completely eliminate those, and pay zero transaction fees, by surcharging. That translates into lower overhead, less price inflation, and greater fairness for consumers. Everyone wins.
A Revenue-Saving Trend
Credit card payment volume grew more than 55 percent in 2018, versus 2012, according to the Federal Reserve. So did technological advancements that facilitate seamless, fully compliant credit card surcharging with total transparency and zero-fee processing. As reported by American Banker, legal surcharging is a being facilitated by turnkey software that makes it simple, easy, and affordable for businesses to take advantage of this groundbreaking trend. “Many of these merchants don’t even take cards until they have a chance to pass on fees,” Jonathan Razi of CardX, a leader in credit card surcharging technologies, told American Banker.
A Timely Solution
The innovation couldn’t have come at a better time. While businesses collectively pay tens of billions in transaction fees, credit card companies apparently think that’s not enough. Bloomberg News reported recently that fees are now expected to increase substantially. That’s after VISA revealed plans to implement the most significant changes in a decade to its credit card processing fee structure. Small and mid-sized businesses will feel the adverse impact of those historically costly fees the most, because they are the most vulnerable to such unprecedented and unanticipated cost increases.
Fairness and Transparency
Razi explains that close to 95 percent of the entire consumer population in the United States is open to surcharging. Not only does the practice of surcharging provide transparent options to consumers, but it means that those who pay in cash or with debit cards are not forced to subsidize the cost of credit card merchant fees. Without surcharging, for example, the expense of paying those steep fees gets reflected in consumer prices that everyone has to pay. That kind of unfair price inflation can be stopped when surcharging removes swiping fees from the equation to level the playing field.
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Consumers and Merchants Both Win
Razi adds that he and his company are in discussions with the four states that are the only ones that haven’t yet conclusively ruled on legal surcharging. Razi believes that the current policy is particularly unjust toward consumers who use cash and other non-credit card forms of payment. Those are typically people in a lower income bracket, which highlights the reason why surcharging is a change that supports greater equity for all, and is long overdue. Thanks to a Supreme Court ruling that was considered a major victory for merchants in the battle to curtail costly transaction fees, the momentum shifted within the past few years. Today surcharging is an increasingly widespread practice, and smart business owners are taking advantage for virtually instant savings.