Credit card fees look tiny - a few cents here and there - but they add up fast and quietly eat into your bottom line. Knowing who pays them, how they are built and how to shift them is essential.
What the fees are made of
Every card payment is split three ways: interchange fees (70-90%, paid to the cardholder's issuing bank), assessment fees (5-10%, charged by networks like Visa and Mastercard at around 0.13%-0.15%), and the processor's markup (5-20%). On a $100 sale that might be $1.65 interchange, $0.15 assessment and $0.40 markup - about $2.20, or 2.2%. Multiply that across thousands of sales and it becomes a major line item.
Who actually pays
In nearly every traditional setup, the merchant pays. Accepting cards is treated as a cost of doing business. But if your margins are 5%-10% and you are handing over 2%-3% in fees, you can lose 20%-40% of your profit to processing alone.
Shifting the cost, legally
Two models let you pass fees on. Surcharging adds up to about 3% to card purchases, though it is restricted in a few states like Connecticut and Massachusetts. A cash discount program instead posts a lower cash price - a $500 repair is $515 on card or $500 in cash - and is legal in more places and friendlier to customers. Consumers also directly cover some fees themselves, such as foreign transaction fees, convenience fees and card minimums.
The Cash Swipe angle
Done right, a cash discount program is how more than 1,000 people at Cash Swipe help businesses save 80-100% on their fees while earning passive income themselves - even with zero prior experience.