The always-enigmatic consumer. As the payment landscape shifts in its own enigmatic way, what can be learned by merchants who are concerned with accepting credit cards for their small business? What can we learn about the consumer to enable growth and success?
To a degree, the consumer and their behavior is knowable. Especially when it comes to payment type, we need only look at recent data on payments to peek into what the future holds. Take a 2017 survey by US Bank. Here, we see hints at the average consumer’s relinquishment of cold hard cash for the digital payment options that are on the rise. According to the study, 47% of consumers stated that they would prefer using digital apps to pay, compared to 45% for cash.
While physical cash obviously still holds sway, numbers show it to be receding; that same survey held that 50% of respondents simply don’t carry cash over half the time. Notable, too, is the lesser amount of cash that is held. About half said that they usually carry less than $20 on their persons, and 76% said that they carry less than $50. 5% of respondents said they never use cash. Predictably, the preference for cash matches smaller purchases, namely, less than $50. Naturally, cards are the easier option when compared with lugging around large quantities of cash.
Advancing technology is also changing the payment game. Digital wallets, like Apple Pay and Samsung Pay, have been around for a good while, but the speed and convenience that wearable tech like smartwatches brings to the table means there are fewer and fewer barriers between a consumer’s account and the vendor. Mastercard and Visa announced recently that they’ll be teaming up to offer payment power in fitness trackers. All the advancements mean retailers need to make sure that they are ready.
Lucky for most, terminals are being made de rigueur with NFC (near-field communication) technology included, and so novel applications of the same technology don’t require updates to hardware.
Online, too, there are changes afoot, with new payment processes, especially P2P payments mixing up the landscape. Still, eCommerce is overwhelmingly ruled by the good old-fashioned credit card. The likely reason is the confidence added to the process by the perception of security their branded cards come with. This security is extended to merchants too, who, with the help of their payment gateway, enjoy better security and PCI compliance.
For online consumer behavior, it can be assumed that standard debit transactions are here to stay, although other payment types like ACH transactions have been growing recently.
The underlying suggestion we can glean from the lay of the payment land is that essentially, more is better. Merchants can’t really afford to be exclusive when it comes to accepting credit cards for their small business. Luckily with Moolah, payment processing online or in person couldn’t be easier. With the addition of the versatile Poynt Terminal that we set merchants up with, it’s likely that you’ll be able to roll with any changes in consumer behavior for time to come.
Thank you for scheduling. If you have any questions, please contact us at 800-625-1670.
A credit card surcharge is an additional fee added to a transaction when a patient chooses to pay with a credit card. The surcharge is intended to help offset the cost of credit card processing and applies only to eligible credit card transactions.
No. Debit card transactions may not be surcharged under any circumstances, even if the debit card is processed as a credit transaction or entered manually.
Yes. Credit card surcharges may not exceed the merchant’s actual cost of accepting credit cards and are capped at a maximum of 3% of the total transaction amount, in accordance with card-network rules and applicable law.
Yes. Card networks require clear and transparent disclosure of any credit card surcharge. Practices must notify patients through appropriate signage at the practice entrance, point of sale, and anywhere payments are accepted. If payments are accepted online, the surcharge must also be clearly disclosed on the practice’s website.
Yes. Some U.S. states and territories prohibit or restrict credit card surcharging. Practices are responsible for understanding and complying with their state’s specific requirements before implementing a surcharge.
No. While Moolah provides tools and general guidance to support credit card surcharging, compliance with all applicable laws and card-network rules is the responsibility of the merchant. Moolah does not provide legal advice and assumes no liability for a merchant’s compliance.
Most major credit card networks permit surcharging when done in accordance with their rules, but additional requirements or restrictions may apply. Practices should ensure they have completed all required network notifications and disclosures prior to enabling surcharging.
Failure to comply with surcharging rules may result in card-network fines, required refunds, or other enforcement actions. Practices should ensure they fully understand all applicable requirements before applying a surcharge.
Flex does not currently offer built-in support for credit card surcharging. If a practice chooses to enroll in a surcharge plan, payments would need to be processed through Moolah’s payment platform, which is designed to support surcharging and integrates directly with Open Dental.
If you are considering introducing a credit card surcharge for your patients, it is important to understand that there are specific rules and regulations that must be followed when enrolling in and operating under a surcharge plan.
This article provides a general overview of common surcharging requirements. This content is provided for informational purposes only and does not constitute legal advice. It is the responsibility of each merchant to review, understand, and comply with all applicable laws, card-network rules, and regulatory requirements, including notification timeframes, signage requirements, surcharge percentage limits, and jurisdictions where surcharging is prohibited.
If you are unsure about the laws or regulations applicable to your practice, you should consult with qualified legal counsel. Moolah assumes no liability for a merchant’s compliance or non-compliance with credit card surcharging rules or regulations.
Transparent Communication
Card networks, including Visa, Mastercard, Discover, and American Express, require merchants to clearly and transparently disclose when a credit card surcharge is applied.
Practices must clearly notify patients of a credit card surcharge through appropriate signage placed at the practice entrance, at the point of sale or terminal, and anywhere payments are accepted. If payments are accepted online, surcharge disclosures must also be clearly visible on the practice’s website. All disclosures must inform patients that the surcharge applies only to credit card transactions.
Surcharge Limits
Credit card surcharges must comply with both card-network rules and applicable law. The surcharge amount may not exceed the merchant’s actual cost of accepting credit cards and may not exceed 3% of the total transaction amount.
Card-network rules cap credit card surcharges at 3%, meaning that if a merchant’s processing costs exceed this amount, the excess portion cannot be passed on to the patient.
Network and State Restrictions
The major credit card networks, such as Visa and Mastercard, impose specific requirements related to surcharge limits, advance notification, and disclosure.
In addition, several U.S. states and territories regulate or prohibit credit card surcharging. At the time of writing, credit card surcharging is prohibited in Connecticut, Maine, Massachusetts, and Puerto Rico. Other states, including Colorado, Minnesota, Mississippi, New Jersey, and New York, impose restrictions on surcharge amounts or require specific disclosures.
If your practice operates in a state that restricts or prohibits credit card surcharging, you must fully understand and comply with those requirements before implementing a surcharge.
Debit card transactions may never be surcharged, even if the debit card is processed as a credit transaction.
Applicability
Credit card surcharges may be applied only to credit card transactions. Other payment types, including debit cards and alternative payment methods, are not eligible for surcharging.
Regulatory Compliance
Merchants are responsible for maintaining ongoing compliance with all applicable card-network and legal requirements. This includes meeting advance notification obligations, using compliant signage and disclosures, adhering to surcharge percentage limits, and respecting jurisdiction-specific restrictions.
By following these guidelines, dental practices can implement credit card surcharging in a way that aligns with card-network rules and promotes transparency with patients. Clear and upfront communication helps maintain patient trust and supports a positive payment experience.