Digital payments (credit, debit, contactless, and NFC) are increasingly popular, and digital payments penetration rates increased to 89 percent last year, according to McKinsey research. Even more remarkable is the rate of using two or more forms of digital payments also increased from 51 percent in 2021 to 62 percent.
As contactless POS terminal penetration grows, so do digital wallets. If you build it, they will come.
The Continued Rise of Mobile Wallets, Digital Payments
The move from cards to mobile wallets is also shifting strongly, according to research from Mordor Intelligence. In highlighting the popularity of digital payments and the decrease in the use of cash for payments, offering dual pricing is still an important step in improving your company’s bottom line.
Credit and debit card processing fees are increasing yearly, and Visa and Mastercard control 80 percent of the market. Because they centrally fix prices for their swipe fees, these brands, rather than banks, compete to offer merchants the best deals. However, they also block competition on their networks. According to the Federal Reserve, most competing networks charge lower fees and have less fraud.
As Digital Demands Increase, So Do the Fees
Swipe fees have also increased, according to the Merchants Payments Coalition. Credit and debit card swipe fees soared by 17 percent in 2022 and have doubled in the past decade without competition. As swipe fees have climbed, merchants’ average profit margin remains at three percent, while profit margins have remained at 27 percent for large banks, 45 percent for Mastercard, and 50 percent for Visa.
These fees can sometimes be burdensome for small and mid-sized businesses, especially companies which typically have lower ticket values like coffee shops, gas stations, and fast food restaurants.
Protect Your Margins with Dual Pricing
Celero Choice’s dual pricing program benefits growth-stage firms like these by adding a non-cash service fee to all purchases made with a credit card. Also, customers can pay their bill’s balance “as is” using a credit card or accept a discount in exchange for paying with cash. When customers pay via cash, processing fees may be eliminated. You can finally let customers help pay for rising fees related to rewards cards.
While dual pricing applies to bills paid in cash, a surcharge adds a small fee to the bills paid with credit or debit cards. This surcharge helps the merchant by transferring the cost of processing card payments to the customer so that savings are more easily achieved. Customers wouldn’t give a second thought to pay $1.00 on a $25.00 transaction for the convenience of using their cards.
Easy Setup, Great Support with Celero Choice
Through our Celero Choice program, we train employees, provide in-store signage, and handle the set-up of this critical tool for fighting inflation and shrinking margins for our merchants.
Saving money, giving incentives and streamlined options keep customers loyal and returning for more. The boost to repeat purchases is the result. As cash payments continue declining, our Choice program fills the gap when processing fees increase. Adding a non-cash service fee can help fight your monthly processing costs if your business is burdened by thousands of dollars a month of substantial charges.
To implement Celero Choice or ask a question about our program, contact us today and experience the best in dual pricing for your business.