If you are a business owner looking to reduce overhead costs and reduce monthly spending, surcharging is a great alternative to help offset any credit card processing fees...
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If you are a business owner looking to reduce overhead costs and reduce monthly spending, surcharging is a great alternative to help offset any credit card processing fees...
When a business owner wants to charge their customer a 4% surcharge then they need to pay a 3.84% fee to their processing company to guarantee the charge is being properly offset.
Look at the following examples:
The merchant runs the card for a $100 sale. The cardholder is then charged a total of $104.
If we then take 4% out of the $104 transaction the business owner will pay $4.16 in fees - an effective rate of 4.16%
$104 * 4% = $4.16
$104 - $4.16 = $99.84 deposit
If we instead 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.
To learn more please review the following blog posts: