The Truth About No-Fee & Zero-Cost Credit Card Processing

The Truth About No-Fee & Zero-Cost Credit Card Processing

Charging customers extra to cover the cost of recognition poster process is gaining steam ; find out if it ‘s right for your business ( and why customers do n’t like it ). Advertiser disclosure : Our unbiased reviews and capacity are supported in partially by affiliate partnerships, and we adhere to strict guidelines to preserve column integrity.

Free credit card processing free. barren as a dame. free as in beer. Whatever saying you associate with the parole “ free, ” the mind of getting something for nothing constantly has a limited solicitation. Of course, about nothing advertised as being “ free ” in truth comes without at least some monetary value. Whether it ’ s giving off your personal information to Facebook or merely paying hide fees on something that you thought was going to be release, there ’ sulfur always a catch .
A holocene tendency within the process industry is the heavy selling of alleged “ release ” or zero-cost credit card processing services. With counterchange fees at an all-time high ( and poised to go even higher in 2022 ), such offers can be very tempting to a cash-strapped business that pays hundreds or flush thousands of dollars every calendar month to be able to accept credit cards. unfortunately, these programs — as you might well suspect — aren ’ t actually free. rather, they merely transfer some ( not all ) of the cost of accepting credit cards onto your credit card-using customers. This agreement would work big if your customers gladly accepted having to pay an extra 3-4 % on every credit card purchase just to use their card. That ’ s not going to be the case .
In this guide to “ no-fee ” citation poster work for small businesses, we ’ ll discuss the versatile programs that allow you to pass credit card action costs to your customers. You ’ ll frequently hear the terms “ surcharging ” and “ zero-fee process ” used to describe these programs. however, they ’ ra not all the same thing. Knowing the elusive differences between one program and another is critically important, as not all programs are legal in all jurisdictions .
We ’ ll explain how these programs work and discuss the requirements you ’ ll need to meet if you choose to implement one of them. We ’ ll besides recommend some ace merchant services providers that can set you up with one of these programs. Most importantly, we ’ ll give you an honest discussion of the pros and cons of implementing these programs, so you can decide whether such a program will be a good mind for your business in the first put. Learn More About Our Top Picks
Read more below to learn why we chose these options .

What Is Zero-Fee Credit Card Processing ?

Zero-fee credit card work is a price scheme that passes most ( or all ) of the price of recognition card processing onto your customers sol that they pay the action fees, not you. Zero-fee process can involve either surcharging credit circuit board payments or offering a deduction for customers paying in cash .

Why Consider A No-Cost Credit Card Processing Program?

detached credit circuit board programs normally use software add-ons to allow your payment gateway, virtual terminal, countertop end, or point of sale ( POS ) system to detect when a recognition batting order is used and automatically apply the appropriate charge to the purchase price. If you ’ re using a cash discount program, the same software can be used to apply the discount for customers using other payment methods .
note that such programs will normally only pass on process fees for credit wag transactions. All extra fees associated with maintaining a merchant account, such as account fees, PCI conformity fees, recognition calling card refund fees, etc., are not typically covered. additionally, there ’ s frequently a directly monthly fee that you ’ ll have to pay for the platform itself. As common, nothing in the credit card work industry is truly free .
While the idea of saving money on your process costs is surely appealing, there are many electric potential downsides to consider — downsides that processors trying to sell you a “ free ” processing course of study will either background or not note at all. Credit batting order overcharge, in particular, is probably to depress sales as customers who don ’ thyroxine want to pay the surcharge will take their business elsewhere. Customers who are unhappy about paying excess and believe that you ’ ve implemented the surcharge falsely may even file a charge with the office of their country ’ second Attorney General or report your business to their credit calling card association .
here ’ s a compendious of the benefits and risks of credit circuit board overcharge :

  • Eliminates some or all processing costs
  • Improves predictability of cash flow forecasts


  • May require an additional monthly fee
  • Does not eliminate incidental fees (chargebacks, etc.)
  • Requires adequate signage and notice to customers
  • Likely to lower overall sales volume
  • May result in legal liability if not implemented properly
  • May result in account closure if not implemented correctly

Don ’ t Fall For “ Free Credit Card Processing ” Scams

As legal restrictions on surcharging have fallen, more and more companies are offering “ free ” credit card process programs. As with any product or service that sounds besides good to be true, many of these programs tend to overpromise and underdeliver. Be on the lookout for the follow warn signs of a potential scam :

  • Flat-rate pricing plans that charge the full 4% allowed for all transactions. Unless you’re in a high-risk industry, this is much higher than the industry average. Companies are betting that you won’t care about the high rates since they are passed onto your customers. Needless to say, your customers will care, and you’ll lose sales.
  • Promises to eliminate 100% of your processing costs. For most merchants, even a properly run surcharging program will only eliminate some of the cost of accepting credit cards, not all of it. Surcharging will not reduce the cost of processing equipment, processing fees for debit cards, or incidental fees, such as chargebacks, returns, etc. Also, high-risk merchants typically pay processing rates above 4%, so they’ll still have to pay the difference.
  • Improper surcharging program implementation. Surcharging programs typically rely on a modification to your payment gateway or the software load on your terminal/POS that automatically applies the surcharge and breaks it out as a separate line item on the customer’s receipt. Unfortunately, some companies are selling systems that apply the surcharge to every purchase where a card is used, including debit cards. Doing so violates your processing agreement with the credit card associations and may be illegal in some jurisdictions.

The truth is that any credit card processor can set you up with a surcharging course of study, even though many of them don ’ thyroxine advertise this feature of speech. Your best stake is to go with a reputable, established provider ( possibly the one you ’ re already using ) that will implement the program correctly and provide other benefits, such as excellent customer support. Avoid the temptation to switch to a new company that you know nothing about, and be very leery of offers to eliminate your citation card work costs .

The Best Free Credit Card Processors For Small Businesses

Any merchant services supplier can offer you a “ release ” credit rating card serve ( or surcharging ) platform. Of path, merchant report providers vary greatly in the quality and cost of their services. Our favored providers offer honest, crystalline pricing and excellent customer avail, all while not requiring you to sign a long-run contract .
here are brief profiles of the best release credit card processors that offer surcharging programs :

1. PaymentCloud

Best for bad and eCommerce businesses .

  • High-risk specialist
  • Reasonable rates and fees
  • Free credit card terminal with each account


  • No publicly disclosed pricing
  • A long-term contract required for some high-risk industries

Surcharging programs can be an effective way for low-risk merchants to save money on credit wag process costs. bad merchants, who pay importantly higher process rates than low-risk companies, have even more incentive to use them .
One of the best bad merchant account providers that we ’ ve line up is PaymentCloud. This provider offers its surcharge programs for merchants in all 48 states where the exercise is presently allowed. PaymentCloud can help you with the necessary signage and reprogram your equipment to automatically apply the surcharge whenever a credit card gets used for payment .
Unlike many bad providers, PaymentCloud doesn ’ t accusation an application fee when you foremost set up your account. contract terms and processing rates are all highly variable. You ’ ll have to contact the party and obtain a quote for your business to see what kind of deal the company can offer you. PaymentCloud besides has a great repute among its merchants for ace customer serve and technical support .
Get Started with PaymentCloud Read our in-depth review Jump back to comparison chart

2. Stax By Fattmerchant

Best for high-volume businesses .

  • Month-to-month billing with no long-term contracts
  • Offers transparent membership pricing
  • Includes support for meeting state and federal compliance requirements


  • Expensive for low-volume businesses
  • Not available to high-risk merchants

Stax by Fattmerchant is one of respective innovative providers offering membership pricing, which eliminates the percentage-based markup from your transactions in exchange for a fixed monthly subscription requital. report fees are besides bundled into this subscription tip, making your monthly action costs more predictable .
The company now advertises an optional surcharge plan that works within its Stax Pay integrated payments chopine. This program clearly breaks out the cost of the overload when a credit card is used, giving your customers ample notice of the extra mission and an opportunity to switch to a different payment method ( debit tease, give poster, or ACH transfer ) if they ’ five hundred prefer not to pay it. The program meets PCI Level 1 complaisance requirements and besides complies with federal jurisprudence. Guidance on keeping your program compliant with submit law in your legal power is available through customer support .
While you ’ ll however have to pay your monthly subscription tip ( which starts at $ 49 ) and some incidental fees, Stax by Fattmerchant ’ s surcharging program will save you 100 % on substitute fees and per-transaction authority fees. If you ’ re going to implement a surcharge program, Stax by Fattmerchant is an excellent model of how to do it correctly .
Get Started with Stax by Fattmerchant Read our in-depth revue Jump back to comparison chart

3. VizyPay

Best for merchants seeking compromising pricing options .

  • Month-to-month billing with no long-term contracts
  • Fully transparent pricing
  • Excellent customer support


  • Accepts US-based merchants only
  • Not available to high-risk merchants

VizyPay offers both traditional interchange-plus price and “ free ” programs that pass the cost of credit card processing onto your customers. The company chiefly focuses on cash discount to accomplish this task. VizyPay besides offers a “ hybrid ” plan that imposes a surcharge on credit circuit board payments while leaving the merchant creditworthy for debit wag work charges .
VizyPay ’ sulfur hybrid program charges a flat 4.0% for credit circuit board transactions, which the customer pays. Debit menu serve is the merchant ’ sulfur province, with rates starting at 1.0% + $0.25 per qualified transaction. It ’ sulfur significant to note that mid-qualified and non-qualified debit transactions will cost you 2.50 % and 3.50 %, respectively. refreshingly, VizyPay admits that its hybrid broadcast will only save you 40-60 % of your overall work costs. That ’ s calm a meaning come, however, and with the company ’ mho choice of cash dismiss and traditional merchant-funded process programs, you ’ ll have plenty of options if surcharging doesn ’ thymine work well for your business .
Read our in-depth review Jump back to comparison graph

4. Dharma Merchant Services

Best for nonprofits .

  • Month-to-month billing with no early termination fees
  • Discounted pricing for qualified nonprofits
  • Outstanding sales transparency and highly ethical business practices


  • Not recommended for businesses processing less than $10,000 per month
  • No support for high-risk or international merchants

Dharma Merchant Services has farseeing been one of our darling providers due to the company ’ second noteworthy transparency and commitment to sustainability and sociable responsibility. Dharma has recently introduced a surcharging program called MX Advantage for Surcharging, which comes included as an optional have with its MX Merchant integrated payments chopine .
Unlike other providers offering “ release ” credit card process, Dharma doesn ’ triiodothyronine add an extra monthly fee for surcharging or impose balloon work rates for the service. Your customers will pay the same reasonable interchange-plus rates that you were previously paying for using their credit cards and nothing more. Nonprofits can peculiarly benefit from this program, as the party already offers discounted action rates to qualifying organizations. Customers will be more understanding about paying a overload when they know that more of their contribution will actually go to the induce they ’ re supporting rather than covering engage expenses .
Get Started with Dharma Merchant Services

Read our in-depth review Jump back to comparison chart

5. Shift Processing

Best for cannabis dispensaries and kratom sellers .

  • Zero-fee processing specialist
  • Also specializes in high-risk processing
  • Custom offerings for cannabis dispensaries and kratom merchants


  • Little publicly disclosed pricing information
  • Relatively few user reviews

The appropriately-named Shift Processing is a zero-fee work specialist, giving merchants an easy means to shift ( get it ? ) the cost of requital processing onto their customers. Shift Processing is besides a bad central processing unit, offering customized packages to such businesses as cannabis dispensaries and kratom merchants .
shift Processing offers month-to-month contracts with no batch fees, statement fees, or PCI fees. While a “ detached payment processor ” is never in truth detached, Shift Processing won ’ deoxythymidine monophosphate nickel-and-dime you with extra fees .
Jump back to comparison chart

Zero-Fee Credit Card Processing Programs To Avoid


New York-based Nadapayments was founded in 2018 and only offers a surcharge program for credit poster acceptance. Your customers will pay a bland 3.5 % for credit cards, and you ’ ll pay 1.0 % + $ 0.25 per transaction for debit cards. While there ’ s no monthly report fee, there is a $ 35/month lease tip for the proprietary smart terminal you ’ ll want to accept in-store payments. eCommerce and mobile options are besides available, but the ship’s company doesn ’ thymine disclose much information about them .
While Nadapayments does a better problem than many of its competitors at explaining the rules and restrictions regarding surcharge, the miss of a traditional, merchant-funded choice means that you ’ ll have to switch providers wholly if the company ’ south surcharging plan doesn ’ t work well for your business .


Swipe4Free is a DBA of a supplier called Merchant Industry that markets a surcharging-only program. Despite the numerous claims on the company ’ s website about how much money you ’ ll save by using its program, Swipe4Free charges a high ( $ 49/month ) score fee and numerous early recurring fees that you won’t be able to pass onto your customers. The company besides uses long-run contracts with expensive early termination fees and offers wildly overprice equipment leases .
With so many better options available today, we recommend that you pass on Swipe4Free and other companies like it .

Bankcard USA

Surcharging programs have become indeed popular ( among providers, at least ) in holocene years that many traditional providers are now offering them. Bankcard USA is about equally old-school as they come, and not in a good way. With tiered price plans, long-run contracts, early termination fees, and leased equipment, the party will be very expensive for the average small commercial enterprise owner .
Switching to surcharging will eliminate a fair come of these costs, but not all of them. restrictive narrow terms besides make the party a hapless choice at a meter when therefore many of its competitors have switched to month-to-month bill .

early Ways To Offset Credit Card Processing Costs

If you ’ ve read this far, you probably realize that credit card surcharging may not save you as much money as you had hoped. In fact, it might actually cost you money in the retentive campaign if you lose enough sales and loyal customers. here are some option methods to lower your overall credit rating card work costs :

Factor in march costs when setting your prices. For many years, merchants have merely raised their prices over what they would otherwise charge to account for credit card process costs. This is the easiest way to recoup process costs without having to surcharge, but it doesn ’ t give a discount to customers using other payment methods .

Implement a cash deduction program. With cash dismiss, your advertised prices include a belittled excess total to cover citation menu processing costs. however, customers paying with a different form of payment, such as debit cards, cash, checks, or ACH transfers, will receive a “ cash discount rate ” or refund of this excess come when they check out. Unlike surcharging, cash dismiss is absolutely legal in all 50 states and very easy to implement with any provider. While it may not seem much different from surcharging, customers paying with something other than a recognition tease very like it when they get a little refund at checkout .

Add a convenience fee. A convenience fee is plainly a small fee added to the customer ’ second bill to help defray the costs of credit card processing. Unlike surcharges, public toilet fees are constantly a fixed total, not a percentage of the sale. While convenience fees aren ’ triiodothyronine terribly popular with consumers, they ’ ra legal in all jurisdictions and easily implemented. Be sure to check your processing agreements with the major credit batting order associations for early limitations that apply before you start charging convenience fees .

Switch to a less expensive supplier. The sad truth is that most small business owners in the US pay excessively much for credit tease processing. They ’ rhenium stuck in long-run contracts and give inflated prices under tiered price plans, all while losing money every month through expensive equipment leases and “ hidden ” fees that they weren ’ thymine expecting. If you ’ re concerned that surcharging will hurt your commercial enterprise, you can still save a significant amount of money by switching to a better, more low-cost supplier. Our article, 11 Credit Card Processors With The Lowest Fees & The Cheapest Ways To Accept Credit Card Payments, can help you find one .

3 Considerations For Implementing Zero-Fee Credit Card Processing

If you ’ re badly thinking about implementing a surcharging program, there are respective issues to consider before making the throw. Below are three of the chief considerations that you ’ ll need to take into report before you start surcharging :

Notice Requirements & Signage You can ’ t have a overcharge program without providing adequate notice to your customers that they ’ ll have to pay extra for using their credit cards. Meeting these requirements will entail some cost and feat on your separate, although your merchant account supplier can normally help you. For eCommerce merchants, “ signage ” will normally take the shape of a standard or popup on your web site that explains how the surcharge works.

Local ( State-Level ) complaisance Requirements Because many states ’ anti-surcharging laws have been overturned by discriminative decisions but not formally repealed, figuring out the current state of matter of the police in your jurisdiction can be difficult and confusing. Your processor — or an lawyer specializing in small commercial enterprise police — can help.

Anticipated Customer Reception The worst likely downside to surcharge is that some of your customers will walk out of your store or abandon your web site upon realizing it will cost them extra to use their credit cards. Examine what your competitors are doing before implementing overcharge. If they aren ’ triiodothyronine overload, you ’ ll put yourself at a competitive disadvantage that ultimately costs you more money in lost sales than what you save through surcharge. Surcharging is an accept practice in some industries ( taxi cab, for exercise ) but rare in others .

Is free Credit Card Processing Worth It ?

Whether you call it “ zero-fee credit card serve, ” “ unblock credit card payment processing, ” or simply “ overload, ” the drill of charging customers extra to cover the cost of credit rating wag process is gaining steam. While it ’ randomness never going to be popular with customers, more and more merchants are adopting the practice as the legal barriers against it have fallen in holocene years .
If you ’ ra tempted to implement a free accredit circuit board processing program for your small clientele, carefully consider whether such a program will have a net incontrovertible effect on your cash stream. You ’ ll want to balance the savings in citation card process fees against the potential for lost sales and alienating your customers. unfortunately, the only way to know for indisputable whether a surcharging program will benefit you is to try it out and see what happens .
The potency of surcharging will vary quite a bit from one industry to the future. major retailers such as Amazon and Walmart don ’ deoxythymidine monophosphate function surcharging at all, but if your business specializes in selling niche products unavailable in big-box stores, you might be able to benefit from surcharging with minimal lost sales. Watch your competitors ’ behavior before you start charging your customers extra for using their credit cards. If the majority of your steer competitors already use surcharging, then you should be able to get away with it. But if none of your competitors use surcharging, you credibly don ’ thyroxine want to be the first one to try it .
If you ’ ve decided to shift credit rating circuit board processing costs to your customers, we recommend that you implement a cash deduction program rather than charging credit calling card users extra. While the net effect of either program is identical, cash dismiss programs don ’ t have the legal complications of surcharge, and they ’ re more palatable for your customers .
We besides recommend that you approach your current merchant services provider for help if you want to start surcharging. You ’ ll want a program that mechanically breaks out the overload and merely applies it when permissible. Trying to add a manual surcharge to every transaction is a recipe for catastrophe .
Have you had any experience with any of the companies profiled in this article ? Have you had any experience with surcharging or cash dismiss programs ? If so, please drop us a comment and let us know !

In Summary : The Best Free Credit Card Processors For Small Businesses

  1. PaymentCloud:
    • High-risk specialist
    • Free credit card terminal
    • Excellent customer support
  2. Stax by Fattmerchant:
    • No long-term contracts
    • Offers membership pricing
    • Includes legal compliance support
  3. VizyPay:
    • Month-to-month billing
    • Transparent pricing disclosures
    • Excellent customer support
  4. Dharma Merchant Services:
    • Month-to-month billing
    • Discounted rates for nonprofits
    • Outstanding sales transparency
  5. Shift Processing:
    • Zero-fee processor
    • High-risk specialist
    • Month-to-month contracts

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