Cash Discount Merchant Services

The methods of payment have changed and have revolutionized a lot. A business not accepting card payment is considered handicapped and when it comes to such payment there comes the topic of cash discount merchant services. It is sometimes considered as a surcharge or an illegal charge deducted on their bill but Is it that bad and illegal? Find out in the article

What does it mean?

It means that when a customer pays with a credit card or any type of card used for payment, a certain amount of charge accordingly is attached to the payment taken as the service fee, and based on this cash discounts are given on other customers who played in cash. The method has certain restrictions when it is implemented, mainly three clauses are attached that are the customers should know verbally about this deduction, the correct rate should be posted on the check and the bill of the customer should have a clear display of these deductions.

However, if this deduction is not done by your payment terminals you may have to do it manually and any single penny taken as a service fee if found to higher than the expected rate is seen as an offense in the sight of the law. So one who is applying such a discount should have a payment terminal enough to deduce these deductions and show them properly on the bill.

Lady paying

Is it legal?

When done properly, yes it is there is a small difference between surcharge and cash discount merchant service. When the fee is taken or deducted according to the rates of transaction and is made clear to the customer by bill or verbally while if the businessman starts adding up the fees in the name of charges it is completely illegal. Howsoever, different merchant provider has different rate s for transactions.


When it comes to the merchant if he uses the scheme correctly it a great boost to the business.

The merchant gets to reduce fees and charges for credit card related payments, the scheme is full of simplicity and is easy for both customers and the businessman to understand and more the reduced fee lesser is the debt and burden.

I hope, you liked it out to know about what is merchant cash discount and how does it work. Thank you for reading!


Lynne Huysamen

Mommy to a pigeon pair, blogger and online marketer. Lover of chocolate, good books and buckets of coffee.

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