New Law Allows Business Owners to Accept Credit Cards for Free
Credit card processing fees can be a major pain for a small business owner. For every credit card transaction, a merchant services company gets a cut of the profit, which eats into the profit of the business.
Merchant services companies often charge business owners a fee per transaction in the form of a percentage between 2-4%. Others charge a rate like fifty cents per transaction. Some even charge both a flat rate and a percentage! While the fees may not sound like much, these numbers can quickly add up, leaving a business owner feeling drained and frustrated.
Let’s say a business grosses $100,000 in credit/debit card transactions per year. The business owner will end up paying at least $3,500 on those transactions. But she still doesn’t get to keep the remaining $96,500. Much of it will go toward additional business expenses, such as overhead costs, payroll, and placing orders to suppliers. So, in the final analysis, the $3,500 in credit card processing fees may eat up about 10-20% of the total profit! Had the business owner been able to keep that money in her pocket, she could have invested that 10-20% increase in profit margin back into her business.
The new game changer in the market is free processing, namely through Swyping. Businesses can now accept cards for free.
Thanks to a new law passed in 2016, credit card companies and businesses can now use surcharges to cover the cost of credit card processing fees. Essentially, this means customers can now pay the cost of the transaction fees instead of the business owner. Rather than business owners paying out of pocket for accepting credit/debit cards, they can now pass the charges onto their customers.
But, please don’t fret for the customer. While this new law allows business owners to save thousands of dollars, the cost to the consumer is marginal. Consumers will only have to pay a few extra pennies on the dollar and will not feel a loss.
Think about the last time you went to a gas station. If you used a credit/debit card, you were charged slightly more than if you were to use cash. However, the extra cost is so small, that most people barely notice it and feel that it’s worth the convenience of using a card.
This new method, which we call “no-cost merchant services,” is completely changing the way business is done. For one thing, the money that business owners are saving gives them the freedom to use that money for other things instead of having to give it away to a merchant services company.
As no-cost merchant services become the norm and replace the traditional way of doing things, more business owners will be able to keep more of their money in their pockets at little cost to consumers. This works out in the interest of everyone — except maybe those pesky merchant services companies.
Learn more about Swyping and stop paying processing fees today!