Surcharge and Cash Discount
What is a Surcharge Program? Explanation and Benefits

Many consumers today choose to pay with a credit or debit card instead of carrying cash. Why? Well, partially because fumbling around with cash and change at the counter can be cumbersome. Cards are simply more convenient. However, that convenience comes at a price to the merchant through credit card processing fees.
In the payments industry right now, there’s plenty of buzz around cash discount and surcharge programs to help merchants offset credit card processing fees. People are wondering which is better, how the programs work, and if they’re even legal. Allow us to clear things up.

Table of Contents
1. Cash Discount Programs
2. Surcharge Programs
3. How Our Surcharge Program Works

Cash Discount Programs
A cash discount program allows merchants to offer customers a discount on their transactions when they choose to pay with cash, check, or debit card. The discount amount typically falls within 3 – 4% of the total sale amount.
Businesses that most often use cash discount programs are gas stations. You may have even seen signage for this type of program at your local gas station. Participating stations typically post a per gallon price for credit card customers next to the discounted cash price to encourage customers to step inside and pay with cash. According to Visa, gas stations like these are among the only merchants that “properly utilize a cash discount method”.
While this type of program is legal in all 50 states, major card brands Visa, MasterCard, and Discover have publicly indicated that they want merchants to use a surcharge program over cash discounts. In fact, Visa released a bulletin in 2018 which stated that many cash discount programs are “non-compliant” with their regulations.

Surcharge Programs
With a surcharge program, merchants charge and additional fee on credit card transactions only, which helps them to offset the fees associated with processing those transactions. While this is the preferred program by the major card brands, it is not yet permitted by all 50 states. The states that currently do not allow surcharging are Colorado, Connecticut, Kansas, Maine, Massachusetts, and Oklahoma. If a merchant conducts business in multiple states, they can still surcharge, but only in states where it is legal.
You may be wondering, why would a merchant choose that program if it’s just going to cost their customers more money?
That’s a valid question, and of course merchants take their customers’ wallets into account. However, the industry consensus is that merchants who complete just one month of the program generally stick with it. This is because the amount of money a merchant can save on their processing fees by surcharging transactions simply outweighs the handful of customers who may balk at the fee. When you explain the benefits and show the value of the program, it’s an easy sell for small to mid-sized retail stores, restaurants, service businesses, and more.
Keep reading to see how it works!

How Our Surcharge Program Works
While surcharge programs may differ slightly between payment processors, the root of them remains the same. It’s a way for merchants to require customers to pay for their own convenience, rather than take on those expenses themselves.
EMS’ surcharge program, as we highlighted above, allows a merchant to substantially reduce their monthly credit card processing fees, because those fees become the responsibility of the customer. This helps merchants to rapidly increase profitability, which can be especially impactful for smaller businesses.
Here’s how it works. First, a merchant doesn’t have to change any of their prices to implement this program. All they need to do is post signage stating that all credit transactions now carry a 3% customer service charge. EMS will provide this signage and register merchants with card brands when they choose to implement a surcharge program. We’ll also provide a terminal or POS system equipped to process surcharged transactions simply and securely.
For additional information call 866.367.1818 or visit