Zero Fee Processing

Zero Fee Processing: How Does That Work?

What is Zero Fee Credit Card Processing?

Fees, often heavy, are a part of doing business. Companies of all sizes pay different kinds of fees while accepting payments from their customers to their banks. Usually, this fee is highest for credit cards.


Credit card processing fees are the extra amount that banks levy from merchants for the privilege of enabling credit card transactions. Interchange fees, PCI compliance fees, chargeback fees, and service fees are some of them.


Zero-fee credit card processing is a method of making a credit card transaction with no extra processing costs for the merchant. This payment processing method is a benefit for small business owners which helps boost their revenue.


In this article, let’s look into how it is different from the surcharged credit card payment processing method, how it works, and what benefits you can look forward to.

Surcharge vs. Zero Fee Credit Card Processing

Businesses pay an additional fee to their banks for merchant services (credit card processing) which is typically 3-4% of the entire transaction. These are known as credit card processing fees or surcharges that are deducted from your merchant account.


These extra transaction fees can make it difficult for small business owners, in particular, to make a profit. To cover these credit card processing costs and improve their bottom lines, businesses modify their pricing structure and make their customers pay, as shown below.

example of surcharge on a receipt



Understandably, credit card surcharging disappoints cardholders and there are still fees to the business owner. 


Fortunately, there is a simple solution that can be used by both e-commerce brands and businesses that serve their customers in-store.


Zero-fee credit card processing allows even small business owners to offer merchant services to their customers for no extra fees to the business owner. Such credit card processing solutions improve your revenue while satisfying your customers at the same time.

How No-Fee Credit Card Processing Works

Free credit card processing works in two distinct ways.


One, the customer pays for access to the merchant services in exchange for bank rewards. The rewards offered by the banks depend on the card brands. Even though the customers have to pay credit card processing fees, they will get value in return by using their preferred method of payment.


The additional amount paid by the customers is usually called a convenience fee. It is quite common for merchants to shift this to their customers as the latter get rewards from their banks such as cashback, offers, discounts, and coupons. Businesses use a notice like the following to let customers know about it beforehand:




Two, the merchant (i.e. you) offers a cash discount program to incentivize customers to pay in cash without making any edits to the pricing model. A lot of businesses put up notices like the following to let their customers know about the discount:




Using such no-cost credit card payment processors brings three crucial advantages for your business.

Benefits of Zero Fee Credit Card Processing

Zero-fee credit card payment processing have both short and long-term advantages.

1. Lower Credit Card Processing Fees for Your Business

Zero-fee credit card processing decreases your credit card processing fees by:


  • Incentivizing your customers to pay with cash instead of using a card. Leverage the cash discount program as it will charge less.
  • Enabling you to explore and consider different point-of-sale (POS) solutions that are more economical for your business.


You will also save more as you will be taxed less on your merchant account and will pay fewer additional charges such as PCI compliance fees and chargeback fees if your customers opt to pay cash, instead of by using any cards. 


Another benefit of cash discount programs is that your customers are more likely to return or recommend your business to more of their friends who love leveraging reward programs. 

2. Invest More Profits Back into the Business

As a business owner, your aim is to expand your business. Broadly, this means serving more customers and/or satisfying more needs for each customer. To do so, you need to invest your profits back into technology and human resources.


The degree of investment depends on how much profit you make. In the previous benefit of zero-fee processing programs, we touched upon how it decreases your overhead costs and boosts your margins.


This additional surplus cash will bring you more investment opportunities. You can either build more products, offer more services, improve your current products and services, or increase your production or service capacity. Limited profits decrease your options for expansion.

3. Freedom to Adjust Pricing of Your Product or Service

The pricing of your products and services depends on the following factors:


  • Your competitors’ pricing.
  • The value obtained by the customer.
  • Transaction costs.
  • The investment required to build the product or offer the service.
  • Other costs such as marketing, sales, customer service, etc.


The first three factors are out of your control, which makes it challenging for you to control your pricing model fully. Monthly fees for payment processing increase the costs of your products and services which can drive your customers away and/or decrease their lifetime value.


Zero-cost payment processors give you more freedom by removing an external factor that directly affects your pricing strategies. This helps all types of businesses from any domain gain a competitive edge while charging their customers.


Now, the challenge in front of you is to choose a credit card processing company that meets all your business needs. It should accept all the credit cards such as MasterCard and Visa, deposit money into your merchant account via ACH deposits, and be compliant with all the regulations.


Fortunately, there is a solution that provides all of the above.

Elevate Your Business with Von Payments’ Zero Fee Payment Processing

Zero-fee payment processing empowers your customers to pay for your products or services in the payment method of their choice while costing you nothing. Furthermore, it decreases your cash-handling costs while increasing customer satisfaction.


This payment processing method works in two ways. First, it charges extra fees to the customers. Second, it incentivizes the customers to use the cash discount program where the business owner will get paid in cash and cut out the processing fees. 


Zero-fee processing has three distinct benefits for businesses of all sizes — it decreases your credit card processing costs, enables you to invest more into your business, and gives you more control over your pricing strategies.


Von Payments offers zero-fee payment processing solutions for businesses of all sizes. We aim to empower even non-traditional companies in high-risk domains to offer their customers a reliable, economical, and dynamic payment processing solution.


Give us a call and we will build a customized solution to meet all your needs.