Credit Card Processing Fee on Customers

[Bliss-Hookah]

There are a lot of companies offering free CC processing. which means they add CC fees on customers. In my case that saves me 30k+ every year. 

Is Square planning to add this feature in their CC fees? 

Customers have to pay 2.5% extra if they pay by card. or something like that. 

[JK_Fiber_Art]

Hi Bliss-Hokah,

I though it would be a good idea to look into some of the 3rd party services that are offering no fee processing to merchants.  On the surface, the thought sounds amazing.  Note: I can't speak for Square but, you can submit your suggestion as a Feature Request - who knows, maybe if enough people want the same thing, anything is possible.

What I found was quite educational and people really need to do their homework as each of these 3rd party services are different.

Zero-cost credit card processing automatically adds a surcharge to the transactions.  Most states within the US have a 4% surcharge limit on each transaction.  So for example, if a customer pays for a $10 drink the merchant would tack on an additional $0.40 so the total charge to the customer would be $10.40.   If a customer pays with a credit card the terminal would automatically add this surcharge to the final amount.   It is worth noting that debit card transactions cannot be surcharged (the plus side, debit card transactions carry the lowest interchange fees of all card types).

If you're considering a zero-cost program, it's essential to remember a few downsides.

* Firstly, customers may not be happy about paying a premium to use their credit cards. As most businesses in the United States now allow credit card payments, passing on card fees to customers can be seen as a competitive disadvantage.   If you're in a competitive niche, passing on fees may cause customers to look elsewhere.   People have grown to rely on credit card rewards.

* Secondly, each state has rules about zero-fee credit card transactions, surcharging, and other similar fees.  So it's critical to understand your state's laws before proceeding.  The following states and territories have limitations for passing credit card transaction fees to their consumers:

California
Colorado
Connecticut
Florida
Maine
Massachusetts
New York
Texas

Last:  Read the fine print:
Despite the “no-fee” processing companies allowing you to transfer transaction fees to the customer, they may still require additional charges for service or membership fees, PCI compliance, gateways, chargebacks, convenience fees, and equipment.  Some also expect a certain or minimum sales volume each month - make sure you're comfortable with the Terms of Service before signing any agreement.

[alexandriak]

As a business owner when I see places do this I tend to not return. It's tacky. Work on your margins (said with much respect).

[VanKalkerFarms]

They had service fees set up to handle this but then took them away because their backend is not set up properly with Visa etc to code the service fees.  I don't like the idea personally, but you could always do cash discounts where the price already includes the fee and then you take off for cash but I don't see why just take the higher price cause cash is far from free to take.

https://www.sellercommunity.com/t5/Product-Updates/FAQ-Passing-Square-fees-to-customers/ba-p/692469