Is free debit card processing too good to be true? If you're searching for methods to enhance your company and have this question, VMS can help.

Is free debit card processing too good to be true? Let’s face it: no business wants to go through the trouble and cost of opening a merchant account simply so their customers may use credit cards.

Small businesses can pass credit card processing costs to customers if they pay with cash. “Surcharging,” “cash discounts” and “zero-fee processing” are not all the same thing. Not all programs are legal in all jurisdictions, so you’ll need to check your state’s laws before implementing one. If you’re searching for methods to enhance your company and have this question, VMS can help.

How Does Free Credit Card Processing Work For Small Businesses?

Free credit card programs usually use software add-ons to allow your payment gateway, virtual terminal, countertop terminal, or point of sale (POS) system to detect when a credit card 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.


5 Things to Think About When Implementing Free Debit Card Processing


  • Lower Credit Card Processing Expenses: By adopting surcharging, you will save money overall on your credit card processing costs. However, you will not be able to completely remove those expenses, so don’t be duped by businesses who advertise surcharging as “free credit card processing.”
  • Customers Are Encouraged to Use Alternative Payment Methods: Older clients often prefer to pay in cash, and some customers may not even have a bank account, much alone a credit card. Cash discount schemes, in particular, encourage customers to save money by paying using a means other than their credit card.


  • Surcharging Programs Aren’t Actually “Free”: While a surcharging program may transfer the expense of transaction processing onto your consumers, you will still be charged a slew of additional costs. Surcharging may not make sense if you only accept credit cards on rare occasions or have a very low volume.
  • Requirements for Notice and Signage: You can’t have a surcharging scheme unless you notify your consumers that they’ll have to pay a surcharge for using their credit cards.
  • Sales that were lost: The most serious possible disadvantage of surcharging is that your consumers will leave your shop or quit your website once they realize it will cost them more to use their credit cards.

Is Free Debit Card Processing Worth it?

Surcharging is the practice of charging customers extra to cover the cost of credit card processing fees. If you’re tempted to implement a zero-fee processing program, consider whether it will have a net positive effect on your cash flow.

The efficacy of surcharging schemes varies greatly by industry. Watch your competitors’ behavior before you start charging your customers.

The Finest Free Credit Card Processing Services

Every merchant services provider provides a credit card processing package that is free of charge. Of course, the quality and pricing of merchant account providers’ services varies significantly. VMS has straightforward pricing and great customer service without forcing you to sign a long-term commitment.

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