Reducing the Burden of Transaction Fees

I bought a new purse at a local boutique this weekend, and when I went to the counter to pay, a big sign at the cash register got my attention: "10% off if you pay with cash."

Huh? I didn’t understand, but I wasn’t complaining. Then I read this article in the Startup Journal.

The store owners weren't trying to pull a fast one on the IRS, they were just trying to avoid paying outrageous credit-card processing fees.

According to the article, “a typical supermarket pays 24 cents in fees when a customer buys $40 of groceries with a debit card and a PIN. The fee rises to 35 cents for a signature-debit transaction and can be more than 50 cents when a customer uses a plain-vanilla credit card."

The article goes on to detail the many ways that business owners are trying to avoid the high fees, inclduing "steering" customers toward PIN-activated debit transactions. Or in the case of the local boutique that sold me the new purse, giving customers an incentive to pay with cash.

NFIB is also aware of the high fees that merchants pay for credit-card processing and offers negotiated rates with MasterCard and Visa to members who participate in the Solveras Credit-Card Processing Program.