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Tuesday, June 30, 2020

Cash discounting 2.0 a potential game changer

As millions of small businesses struggle to contain costs in the face of coronavirus-related business slowdowns, cash discounting is taking on an added measure of importance. But the process—which generally requires a price markup at checkout and a corresponding discount for cash-paying customers—can be clunky, and often places cashiers in the unenviable position of explaining the process to customers.

VizyPay, an ISO headquartered in West Des Moines, Iowa, took a different approach to cash discounting. Austin Mac Nab, managing partner at VizyPay, described it as cash discounting 2.0. Rather than making noncash adjustments at the checkout, VizyPay clients increase prices across the board, typically by 4 percent, then offer a 4 percent discount to customers paying by cash.

“Our main goal is to avoid friction,” Mac Nab said. “It requires a little extra work, but nobody knows it’s happening, except the owner.” The proprietary technology is now available as a downloadable app for clients using Clover POS systems. The app is free to any VizyPay client that wants to use it to eliminate the drain of card processing fees, he added.

Merchants using the app upload their inventory or menu items to the Cover device. A price increase synch feature in the app goes through and implements increases (typically 4 percent) on each item price to cover processing costs. Then, during the checkout process, if the merchant chooses to offer discounts for cash, they select the VizyPay Cash Discount Tender option, choose cash or check, and the discount is applied automatically to the balance due and reflected on the customer’s receipt.

Clover app first, others to come

“We chose Clover specifically for the first app because there are over a million of these deployed across the U.S.,” Mac Nab said. The company is also developing apps for other popular POS devices, he added.

Mac Nab said businesses using VizyPay’s cash discounting offering have realized over $8 million in savings to date. “With the introduction of this app, we’re furthering our commitment to be the best partner for our clients,” he said, adding the company is “always searching for ways to help them save money.”

“We built this from scratch,” Mac Nab said. “We wanted to make it a seamless way for clients to upload the app, increase pricing, usually by 4 percent, and have the ability to choose those items they don’t want to increase prices on.” There’s also an easy to access “call me” option in the app that connects users to the VizyPay support team if they need help.

The potential cost savings from cash discounting 2.0 are significant enough to encourage VizyPay customers not using Clover to make the investment and implement cash discounting, Mac Nab suggested. “If I can save them $15-20,000 a year [in processing fees] it’s well worth it,” he said. end of article

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