What is Dual Pricing?
Simply put, a dual pricing system provides discounts to customers who opt to pay with cash. This is a win-win incentive that saves customers money while reducing credit card transaction fees. Businesses can adopt this pricing model through a payment terminal or point-of-sale (POS) system, presenting both cash and credit prices. Or, if handling business-to-business transactions, can list the payment options on clients’ invoices. To ensure compliance, it’s crucial to advertise the credit card price either as the full amount or alongside the cash price.
How Dual Pricing Works
- Transparent Pricing: The merchant lists both the cash price and the card price at the point of sale (e.g., $10.00 Cash / $10.35 Card)
- Customer Choice: Customers choose their payment method, effectively deciding whether to pay the service fee
- Fee Mitigation: The higher card price covers the transaction fees charged by card networks, allowing merchants to keep more profit
Benefits To Businesses
- Eliminate/Reduce Fees: Significantly cuts or eliminates the 2.5% to 4% merchant fees
- Compliance: Unlike surcharging, which is restricted in some states, dual pricing is generally legal and compliant across the U.S.
- Increased Cash Flow: Encourages cash payments, reducing wait times for funding
Providing Our Merchants The Competitive Edge
