Approximately 45 percent of Americans make New Year’s resolutions, and according to Static Brain they are 20 percent more likely to attain their goals than those who don’t make resolutions.
Moving into the new year, business owners may want to make a resolution too. And one of the easiest ways to boost your bottom line is to reduce expenses by offering a cash discount program for customers. In addition to incentivizing cash, it eliminates costly processing fees and allows merchants to collect 100 percent of their revenue. Cash discount programs such as PaySavvy can be a powerful tool to offset merchant service fees without increasing rates – and boost revenue by reducing costs.
Cash discount programs work by charging a small service fee to customers using a credit or debit card for purchases. Customers willing to pay in cash receive a discount because they are not charged the service fee. This allows those that carry cash to enjoy the same rates they’ve always paid, while the business owner is able to pass on the burden of processing with the cardholder.
Why a Cash Discount Program?
Other than the ability to virtually eliminate monthly credit card fees, cash discount programs help small businesses, such as convenience stores that have average transactions of under ten dollars, reduce expenses. Underlying interchange costs on card usage is approximately .05 percent plus 22 cents per transaction before processing fees. Accepting cards for small value transactions can eradicate the merchant’s margins. Offering a cash discount program, where the card usage fees are passed on to the customer, can mean the difference between a profitable business and one that is barely making it.
Is this New?
According to the Dodd–Frank Consumer Protection Act, passed in 2010, it is not unlawful to offer a discount for taking cash and it’s been a common practice for gas stations for at least 15 years, where the discount is offered on fuel. Government agencies, such as the DMV, IRS, and local court systems have always charged a service fee in relation to card usage. The cash discount program allows merchants to interact with consumers in a slightly different way, while enjoying the benefits conglomerates have been using for years.
Double Up with an ATM
In addition to virtually eliminating processing fees with a cash discount program like PaySavvy, merchants may want to consider adding an ATM on-site to boost revenue. With easy cash access, profitability will increase since consumers show a distinct preference to pay for small purchases with cash. An ATM terminal will also draw foot traffic, helping to retain current customers and draw new traffic to your location.
Make a new year’s resolution to increase profitability by eliminating expensive processing fees with the PaySavvy cash discount program.
For more information on getting started with the PaySavvy program or to inquire about ATM placement, contact Star Financial today!