What Is a Cash Discount Merchant Services Program?

 A cash discount program allows you to reduce or even eliminate your credit card processing fees by offering customers a discount for paying with cash. Many merchants using this model pay little to nothing for card processing—and you might be wondering, “How does this work?”

Here’s how: The cash discount model typically uses dual pricing at the point of sale. Thanks to the Durbin Amendment, merchants are legally allowed to offer a lower price for cash payments. This approach isn’t new—gas stations have used cash vs. credit pricing for years. Unlike surcharging, which adds a fee for using cards, dual pricing simply gives customers a choice between two clear options.

With the help of a smart terminal or POS system, implementing cash and card pricing is seamless and compliant. It’s a powerful way for many businesses to lower expenses—though it may not be the right fit for every industry.

Note: Cash discount programs are unavailable for merchants on Fiserv or Wells Fargo-sponsored platforms. Only select, approved Fiserv surcharge programs or certified third-party providers can support similar setups.
 

No, they’re not the same—though they may seem similar, the differences matter. Here’s a quick breakdown:

Surcharging:
Surcharging adds a fee to a customer’s total when paying with a credit card. This is compliant when done properly and is available through approved programs like the Fiserv Surcharge Solution and certified third-party providers for Clover and Fiserv platforms.

Cash Discount:
With a cash discount program, dual pricing is shown upfront—cash and card prices. Smart terminals or POS systems handle this automatically. Customers paying with cash or check get a lower price, while the card price includes processing costs—shifting the expense away from the merchant. It incentivizes cash without adding a fee.

Can E-Commerce Use Cash Discounts?
Yes, they can! While cash discount programs are most commonly used for in-person payments, many online platforms support similar models. Since physical cash isn’t possible online, e-commerce stores can offer a discount to customers who pay via ACH or electronic checks (eChecks). This mirrors the savings of in-person cash payments. Ask us for more details.