What is a credit surcharge program? And why do you, a small business owner, need it?
A credit surcharge program is a strategy merchants can use to offset credit card processing fees. If the customer pays with a credit card, merchants add a fee to cover those fees. This way, transaction fees that go to the likes of Chase Bank, Visa, and others don’t end up hurting the business.
Now, you may think, “What’s the big deal? Why do I need a credit surcharge program if it’s just a small fee?”
Here’s why: when you actually crunch the numbers, you’ll see those fees kill your bottom line.
Consider this example. You operate a rhinoplasty and plastic surgery clinic. Each year, you bring in $1,500,000 from all your procedures. To pay their bills, your patients frequently use credit cards. $750,000, or half of your revenue, comes from credit card transactions. If you pay an average fee of 3.5% on that revenue, you pay $26,250 per year just in credit card processing fees.
A credit surcharge program, if used correctly, eliminates the problem of transaction fees. We’ll go over all you need to know below.
Yes, credit surcharge programs are legal. They’ve been around for some time.
Most likely, you can implement a credit surcharge program at your business, whether you run a rhinoplasty center or a clothing shop.
Note: credit surcharge programs are currently legal in 46 states. The only four states where credit surcharges are illegal are Colorado, Massachusetts, Kansas, and Connecticut. Rules constantly change, so stay updated by checking our page that covers all the credit surcharge program rules.
Before you implement a credit surcharge program, there are few guidelines you must follow:
As long as you’re in a state that allows credit surcharge programs and your company follows the rules, you can use a surcharge solution to get rid of transaction fees. Over time, the positive effects on your company’s bottom line will be substantial.
Know that you can boost profits considerably with a credit surcharge program. But before we go through the numbers, let’s answer a few questions that you may have about implementing a credit surcharge program:
Overall, the benefits of a surcharge solution make such a program a must. The exact dollar value of a credit surcharge program varies by your type of business and how your customers prefer to pay. But every business sees a boost to their bottom line. At Nadapayments, merchants who partner with us have seen profits increase by $10,000 and more.
For instance, let’s say your luxury fashion boutique does $1 million in sales per year, with $500,000 of that revenue being processed via credit card payments. If your effective rate is 3.5%, that means you pay $17,500 per year in credit card transaction fees. Eliminate those fees, and you’d have $17,500 more per year in your pocket.
To give you an even better idea, look over the example below of a rhinoplasty and plastic surgery clinic.
For this example, let’s assume the following:
Congrats, you’re doing quite well. But you could be doing better. Since insurance doesn’t typically cover rhinoplasty, most of your patients pay out-of-pocket. Considering the high cost of a rhinoplasty procedure, many of your patients probably choose to set up a payment plan with automatic credit card payments. As research from the Federal Reserve research shows, as the value of a transaction increases, the more likely a customer is to use a credit card.
Considering all that, here’s how much credit card fees are impacting your financials:
Now, think if you could eliminate those credit card fees completely. Your income from your rhinoplasty center would jump $25,025. If you make $200,000 per year (which is solid), your income will rise to $225,025. That’s an increase of 12.5%!
You may be wondering, “Is it really that easy to boost profits by 12.5%?”
The answer is yes. All you have to do to see that much more money in your pocket is implement a credit surcharge program.
Just think of all that you could do with that extra $25K. You could:
The point is this: that money belongs to you—not the credit card companies. So, take the step to take home 100% of your revenue by using a surcharge solution.
Whether you have a rhinoplasty center, eCommerce store, or ice cream shop, you can boost profits overnight simply by implementing a credit surcharge program. In fact, you could earn more than $25,000 more per year.
How can you pass up that opportunity?
At Nadapayments, we’re ready to help you make the most out of credit surcharge programs. Our solution easily integrates with your credit card installment plan and has all the capabilities you need, including mobile, online, and virtual terminal credit card processing.
Even better, we can set up your credit surcharge program in days. Before next week, you can say goodbye to credit card processing fees for good. And you can make your business more financially sustainable.
Ready to enjoy all the benefits of a credit surcharge program? Contact us at +1 (929) 293-1800 or click the link below.